TORONTO, ONTARIO--(Marketwired - Feb. 28, 2014) - Canadian Apartment Properties Real Estate Investment Trust ("CAPREIT") (TSX:CAR.UN) announced today strong operating and financial results for the year ended December 31, 2013.
| Three Months Ended | Year Ended | |||||||||||
| December 31 | December 31 | |||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||
| Operating Revenues (000s) | $ | 124,018 | $ | 112,109 | $ | 477,023 | $ | 412,421 | ||||
| Net Operating Income ("NOI") (000s) (1) | $ | 66,033 | $ | 62,651 | $ | 273,854 | $ | 237,916 | ||||
| NOI Margin (1) | 53.2 | % | 55.9 | % | 57.4 | % | 57.7 | % | ||||
| Normalized Funds From Operations ("NFFO") (000s) (1) | $ | 36,344 | $ | 33,556 | $ | 159,375 | $ | 132,553 | ||||
| NFFO Per Unit - Basic (1) | $ | 0.338 | $ | 0.356 | $ | 1.562 | $ | 1.486 | ||||
| Weighted Average Number of Units - Basic (000s) | 107,443 | 94,210 | 102,064 | 89,215 | ||||||||
| NFFO Payout Ratio (1) | 87.8 | % | 81.3 | % | 74.8 | % | 76.4 | % | ||||
| (1) | NOI, NFFO and NFFO per Unit are measures used by Management in evaluating operating performance. Please refer to the cautionary statements under the heading "Non-IFRS Financial Measures" and the reconciliations provided in this press release. |
- Strong occupancies and increased average monthly rents, combined with contributions from acquisitions, drive 10.6% and 15.7% increase in revenues in fourth quarter and year ended December 31, 2013, respectively
- Average monthly rents for residential properties up 2.9% in 2013 compared to last year
- Portfolio occupancy remains strong at 98.0%, up from 97.9% last year.
- Acquired 4,931 apartment suites and MHC sites in 2013, strengthening and further diversifying property portfolio
- NFFO up 8.3% in fourth quarter and 20.2% for year ended December 31, 2013
- Strong accretive growth as NFFO per Unit up 5.1% in 2013 despite 14% increase in the weighted average number of Units outstanding.
- Same property NOI up 3.0% in 2013
- Closed mortgage refinancings (excluding acquisitions) for $507.9 million in 2013, including $333.7 million for renewals of existing mortgages and $174.2 million for additional top up financing with a weighted average term to maturity of 10 years, and a weighted average interest rate of 3.15%.
"2013 was another record year for CAPREIT as we benefited from our significant portfolio growth over the last three years and continuing strong occupancies and increases in average monthly rents," commented Thomas Schwartz, President and CEO. "We also further strengthened and diversified our property portfolio during the year, increasing our presence in our targeted geographic markets and entering new urban growth regions that serve to enhance our risk profile."
"Looking ahead, we believe 2014 will be another strong year for CAPREIT. Our recently-acquired properties are just beginning to benefit from our proven property management programs, and we expect to generate additional portfolio growth through the year. In addition, continuing strong fundamentals in the Canadian multi-unit residential rental sector should allow us to maintain our high occupancies and track record of stable increases in average monthly rents."
| Three Months Ended | Year Ended | |||||||||||
| December 31 | December 31 | |||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||
| Overall Portfolio Occupancy (1) | 98.0 | % | 97.9 | % | ||||||||
| Overall Portfolio Average Monthly Rents (1),(2) | $ | 951 | $ | 975 | ||||||||
| Operating Revenues (000s) | $ | 124,018 | $ | 112,109 | $ | 477,023 | $ | 412,421 | ||||
| Net Rental Revenue Run-Rate (000s) (1),(3),(4) | $ | 476,390 | $ | 429,822 | ||||||||
| Operating Expenses (000s) | $ | 57,985 | $ | 49,458 | $ | 203,169 | $ | 174,505 | ||||
| NOI (000s) (4) | $ | 66,033 | $ | 62,651 | $ | 273,854 | $ | 237,916 | ||||
| NOI Margin (4) | 53.2 | % | 55.9 | % | 57.4 | % | 57.7 | % | ||||
| Number of Suites and Sites Acquired | 3,050 | 980 | 4,931 | 6,984 | ||||||||
| Number of Suites Disposed | - | 438 | 604 | 773 | ||||||||
| (1) | As at December 31. |
| (2) | Average monthly rents are defined as actual rents, net of vacancies, divided by the total number of suites and sites in the portfolio and do not include revenues from parking, laundry or other sources. |
| (3) | For a description of net rental revenue run-rate, see the Results of Operations section in the MD&A for the year ended December 31, 2013. |
| (4) | Net rental revenue run-rate and NOI are measures used by Management in evaluating operating performance. Please refer to the cautionary statements under the heading "Non-IFRS Financial Measures" and the reconciliations provided in this press release. |
Operating Revenues
For the quarter and the year ended December 31, 2013, total operating revenues increased by 10.6% and 15.7%, respectively, compared to the same periods last year primarily due to the contribution from acquisitions, higher average monthly rents, and continuing strong occupancies. For the three months and year ended December 31, 2013, ancillary revenues, including parking, laundry and antenna income, rose by 16.7% and 20.6%, respectively, compared to the same periods last year, due to contributions from acquisitions and Management's continued focus on maximizing the revenue potential of its property portfolio.
CAPREIT's annualized net rental revenue run-rate as at December 31, 2013 increased to $476.4 million, up 10.8% from $429.8 million as at December 31, 2012 primarily due to acquisitions completed within the past twelve months and strong rental growth. Net rental revenue run-rate net of dispositions for the twelve months ended December 31, 2013 was $447.5 million (2012 - $386.3 million).
| Portfolio Average Monthly Rents ("AMR") | ||||||||||||
| Total Portfolio | Properties Owned Prior to December 31, 2012 | |||||||||||
| As at December 31, | 2013 | 2012 | 2013 | 2012 (1) | ||||||||
| AMR | Occ. % | AMR | Occ. % | AMR | Occ. % | AMR | Occ. % | |||||
| Average Residential Suites | $ | 1,060 | 98.0 | $ | 1,030 | 97.8 | $ | 1,061 | 98.2 | $ | 1,030 | 97.8 |
| Average MHC Land Lease Sites | $ | 348 | 97.6 | $ | 439 | 99.2 | $ | 454 | 99.5 | $ | 439 | 99.2 |
| Overall Portfolio Average | $ | 951 | 98.0 | $ | 975 | 97.9 | $ | 1,004 | 98.3 | $ | 974 | 97.9 |
| (1) | Prior year's comparable AMR and occupancy have been restated for properties disposed of in 2013. |
Average monthly rents for residential suites increased by 2.9% to $1,060 as at December 31, 2013 compared to last year while occupancy increased to 98.0% due to ongoing successful sales and marketing strategies and continued strength in the residential rental sector in the majority of CAPREIT's regional markets. Average monthly rents for residential suites owned prior to December 31, 2012 increased as at December 31, 2013 to $1,061 from $1,030 as at December 31, 2012, an increase of 3.0% from last year with occupancies rising to 98.2% from 97.8%. For the MHC land lease portfolio, average monthly rents decreased to $348 as at December 31, 2013, compared to $439 as at December 31 2012, primarily due to the recent acquisitions in lower rent geographic regions. Occupancy for the MHC portfolio was 97.6% at year end compared to 99.2% last year due to the acquisition of 2,808 MHC land lease sites acquired in the fourth quarter of 2013.
| Suite Turnovers and Lease Renewals | ||||||
| For the Three Months Ended December 31, | 2013 | 2012 | ||||
| Change in AMR | % Turnovers | Change in AMR | % Turnovers | |||
| $ | % | & Renewals (1) | $ | % | & Renewals (1) | |
| Suite Turnovers | 26.5 | 2.5 | 6.2 | 16.0 | 1.5 | 6.3 |
| Lease Renewals | 28.8 | 2.7 | 16.4 | 33.7 | 3.3 | 15.3 |
| Weighted Average of Turnovers and Renewals | 28.2 | 2.6 | 28.6 | 2.8 | ||
| For the Year Ended December 31, | 2013 | 2012 | ||||
| Change in AMR | % Turnovers | Change in AMR | % Turnovers | |||
| $ | % | & Renewals (1) | $ | % | & Renewals (1) | |
| Suite Turnovers | 23.5 | 2.2 | 28.7 | 20.3 | 2.0 | 26.8 |
| Lease Renewals | 28.7 | 2.7 | 77.9 | 34.2 | 3.3 | 70.0 |
| Weighted Average of Turnovers and Renewals | 27.3 | 2.6 | 30.3 | 2.9 | ||
| (1) | Percentage of suites turned over or renewed during the period based on the total number of residential suites (excluding co-ownerships) held at the end of the period. |
The lower rate of growth in average monthly rents on lease renewals during 2013 compared to the prior year is primarily due to the lower mandated guideline increases for 2013 (Ontario - 2.5%, British Columbia - 3.8%), compared to the higher guideline increases in 2012 (Ontario - 3.1%, British Columbia - 4.3%). Management continues to pursue Above Guideline Increases ("AGI") applications where it believes increases are supported by market conditions above the annual guideline to raise average monthly rents on lease renewals. For 2014, the permitted guideline increase in Ontario and British Columbia have been set at 0.8% and 2.2%, respectively.
Operating Expenses
Overall operating expenses as a percentage of operating revenues increased slightly to 46.8% and 42.6% respectively for the three months and year ended December 31, 2013 compared to 44.1% and 42.3% for last year, as a result of higher operating expenses for 2013 acquisitions, increased repairs and maintenance ("R&M") and in-suite maintenance costs, partially offset by lower wages and hydro costs in 2013 than last year.
Net Operating Income
In the three months ended December 31, 2013, NOI improved by $3.4 million or 5.4%, and the NOI margin decreased to 53.2% from 55.9% for last year. For the year ended December 31, 2013, NOI increased by $35.9 million or 15.1%, and the NOI margin remained stable at 57.4% compared to 57.7% for the same period last year. The slight decrease in NOI margin in 2013 was primarily the result of lower margin acquisitions completed in the last 12 month period partially offset by higher operating revenues.
For the quarter and the year ended December 31, 2013, operating revenues for stabilized suites and sites increased 3.6% and 3.2% respectively, while operating expenses increased 11.5% and 3.4%, respectively, compared to the same periods last year. As a result, for the quarter and year ended December 31, 2013, stabilized NOI decreased by 2.6% and increased by 3.0%, respectively, compared to the same periods last year.
| NON-IFRS FINANCIAL MEASURES | ||||||||||||
| Three Months Ended | Year Ended | |||||||||||
| December 31, | December 31, | |||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||
| NFFO (000s) | $ | 36,344 | 33,556 | $ | 159,375 | $ | 132,553 | |||||
| NFFO Per Unit - Basic | $ | 0.338 | $ | 0.356 | $ | 1.562 | $ | 1.486 | ||||
| Cash Distributions Per Unit | $ | 0.288 | $ | 0.280 | $ | 1.138 | $ | 1.097 | ||||
| NFFO Payout Ratio | 87.8 | % | 81.3 | % | 74.8 | % | 76.4 | % | ||||
| NFFO Effective Payout Ratio | 62.6 | % | 62.8 | % | 55.4 | % | 58.7 | % | ||||
| LIQUIDITY AND LEVERAGE | ||||
| As at December 31, | 2013 | 2012 | ||
| Total Debt to Gross Book Value | 47.32 | % | 47.25 | % |
| Total Debt to Gross Historical Cost (1) | 56.74 | % | 56.71 | % |
| Total Debt to Total Capitalization | 52.83 | % | 47.82 | % |
| Debt Service Coverage Ratio (times) (2) | 1.54 | 1.52 | ||
| Interest Coverage Ratio (times) (2) | 2.62 | 2.51 | ||
| Weighted Average Mortgage Interest Rate (3) | 3.76 | % | 3.87 | % |
| Weighted Average Mortgage Term to Maturity (years) | 6.0 | 5.4 | ||
| (1) | Based on historical cost of investment properties. |
| (2) | Based on the trailing four quarters ended December 31, 2013. |
| (3) | Weighted average mortgage interest rate includes deferred financing costs and fair value adjustments on an effective interest basis. Including the amortization of the realized component of the loss on settlement of $32.5 million included in Accumulated Other Comprehensive Loss ("AOCL"), the effective portfolio weighted average interest rate at December 31, 2013 would be 3.94% (December 31, 2012 - 4.05%). |
Financial Strength
Management believes CAPREIT's strong balance sheet and liquidity position will enable it to continue to take advantage of acquisition and property capital investment opportunities over the long term.
CAPREIT is achieving its financing goals as demonstrated by the following key indicators:
- Continues to maintain conservative ratio of total debt to gross book value as at December 31, 2013 of 47.32%;
- Debt service and interest coverage ratios for the year ended December 31, 2013 improved to 1.54 times and 2.62 times compared to 1.52 times and 2.51 times, respectively, for last year;
- As at December 31, 2013, 93.9% (December 31, 2012 - 92.9%) of CAPREIT's mortgage portfolio was insured by the Canada Mortgage and Housing Corporation ("CMHC"), excluding the mortgages on CAPREIT's MHC land lease sites and the Ireland portfolio, resulting in improved spreads on mortgages and overall lower interest costs than conventional mortgages.
- The effective portfolio weighted average interest rate on mortgages has steadily declined to 3.76% as at December 31, 2013 from 3.87% as at December 31, 2012, resulting in significant potential interest rate savings in future years;
- Management expects to raise between $600 million and $650 million in total mortgage renewals and refinancings in 2013;
- The weighted average term to maturity of the mortgage portfolio has improved from 5.4 years to 6.0 years as at December 31, 2013;
- As at December 31, 2013, CAPREIT has investment properties with a fair value of $271.1 million that are not encumbered by mortgages and secure only the Acquisition and Operating Facility;
Property Capital Investment Plan
During the year ended December 31, 2013, CAPREIT made property capital investments (excluding disposed properties, head office assets, tenant improvements and signage) of $157.9 million as compared to $128.3 million last year. For the full 2014 year, CAPREIT expects to complete property capital investments of approximately $165 million to $175 million, including approximately $87 million targeted at acquisitions completed since January 1, 2011 and approximately $22 million in high-efficiency boilers and other energy-saving initiatives.
Property capital investments include suite improvements, common areas and equipment, which generally tend to increase NOI more quickly. CAPREIT continues to invest in energy-saving initiatives, including boilers, energy-efficient lighting systems, and water-saving programs, which permit CAPREIT to mitigate potentially higher increases in utility and R&M costs and significantly improve overall portfolio NOI.
Subsequent Event
On January 31, 2014, the third party external management agreements for the performance of certain asset and property management services concluded. The 16 manufactured home communities in Colorado, Texas, Arizona and Michigan, which were managed by CAPREIT for a third party real estate owner, have been sold. The agreements were entered into on December 5, 2012.
Additional Information
More detailed information and analysis is included in CAPREIT's audited consolidated annual financial statements and MD&A for the year ended December 31, 2013, which have been filed on SEDAR and can be viewed at www.sedar.com under CAPREIT's profile or on CAPREIT's website on the investor relations page at www.capreit.net.
Conference Call
A conference call hosted by Thomas Schwartz, President and CEO and the CAPREIT Management Team, will be held Monday, March 3, 2014 at 10:00 am EST. The telephone numbers for the conference call are: Local/International: (416) 340-2216, North American Toll Free: (866) 223-7781.
A slide presentation to accompany Management's comments during the conference call will be available one hour and a half prior to the conference call. To view the slides, access the CAPREIT website at www.capreit.net, click on "Investor Relations" and follow the link at the top of the page. Please log on at least 15 minutes before the call commences.
The telephone numbers to listen to the call after it is completed (Instant Replay) are local/international (905) 694-9451 or North American toll free (800) 408-3053. The Passcode for the Instant Replay is 2320975#. The Instant Replay will be available until midnight, March 10, 2014. The call and accompanying slides will also be archived on the CAPREIT website at www.capreit.net. For more information about CAPREIT, its business and its investment highlights, please refer to our website at www.capreit.net.
About CAPREIT
CAPREIT owns interests in multi-unit residential rental properties, including apartments, townhomes and manufactured home communities primarily located in and near major urban centres across Canada and in Dublin, Ireland. As at December 31, 2013, CAPREIT had owning interests in 41,552 residential units, comprised of 35,372 residential suites and 29 manufactured home communities ("MHC") comprising 6,180 land lease sites. For more information about CAPREIT, its business and its investment highlights, please refer to our website at www.capreit.net and our public disclosure which can be found under our profile at www.sedar.com.
Non-IFRS Financial Measures
CAPREIT prepares and releases unaudited quarterly and audited consolidated annual financial statements prepared in accordance with IFRS. In this and other earnings releases and investor conference calls, as a complement to results provided in accordance with IFRS, CAPREIT also discloses and discusses certain non-IFRS financial measures, including Net Rental Revenue Run-Rate, NOI, FFO, NFFO and applicable per Unit amounts and payout ratios. These non-IFRS measures are further defined and discussed in the MD&A released on February 28, 2014, which should be read in conjunction with this press release. Since Net Rental Revenue Run-Rate, NOI, FFO and NFFO are not determined by IFRS, they may not be comparable to similar measures reported by other issuers. CAPREIT has presented such non-IFRS measures as Management believes these non-IFRS measures are relevant measures of the ability of CAPREIT to earn and distribute cash returns to Unitholders and to evaluate CAPREIT's performance. A reconciliation of Net Income and such non-IFRS measures including Adjusted Funds From Operations ("AFFO") is included in this press release. These non-IFRS measures should not be construed as alternatives to net income (loss) or cash flow from operating activities determined in accordance with IFRS as an indicator of CAPREIT's performance.
Cautionary Statements Regarding Forward-Looking Statements
Certain statements contained, or contained in documents incorporated by reference, in this press release constitute forward-looking information within the meaning of securities laws. Forward-looking information may relate to CAPREIT's future outlook and anticipated events or results and may include statements regarding the future financial position, business strategy, budgets, litigation, projected costs, capital investments, financial results, taxes, plans and objectives of or involving CAPREIT. Particularly, statements regarding CAPREIT's future results, performance, achievements, prospects, costs, opportunities and financial outlook, including those relating to acquisition and capital investment strategy and the real estate industry generally, are forward-looking statements. In some cases, forward-looking information can be identified by terms such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "intend", "estimate", "predict", "potential", "continue" or the negative thereof or other similar expressions concerning matters that are not historical facts. Forward-looking statements are based on certain factors and assumptions regarding expected growth, results of operations, performance and business prospects and opportunities. In addition, certain specific assumptions were made in preparing forward-looking information, including: that the Canadian and Ireland economies will generally experience growth, however, may be adversely impacted by the global economy; that inflation will remain low; that interest rates will remain low in the medium term; that Canada Mortgage and Housing Corporation ("CMHC") mortgage insurance will continue to be available and that a sufficient number of lenders will participate in the CMHC-insured mortgage program to ensure competitive rates; that the Canadian capital markets will continue to provide CAPREIT with access to equity and/or debt at reasonable rates; that vacancy rates for CAPREIT properties will be consistent with historical norms; that rental rates will grow at levels similar to the rate of inflation on renewal; that rental rates on turnovers will remain stable; that CAPREIT will effectively manage price pressures relating to its energy usage; and, with respect to CAPREIT's financial outlook regarding capital investments, assumptions respecting projected costs of construction and materials, availability of trades, the cost and availability of financing, CAPREIT's investment priorities, the properties in which investments will be made, the composition of the property portfolio and the projected return on investment in respect of specific capital investments.
Although the forward-looking statements contained in this press release are based on assumptions, Management believes they are reasonable as of the date hereof, there can be no assurance actual results will be consistent with these forward-looking statements; they may prove to be incorrect. Forward-looking statements necessarily involve known and unknown risks and uncertainties, many of which are beyond CAPREIT's control, that may cause CAPREIT or the industry's actual results, performance, achievements, prospects and opportunities in future periods to differ materially from those expressed or implied by such forward-looking statements. These risks and uncertainties include, among other things, risks related to: reporting investment properties at fair value, real property ownership, leasehold interests, co-ownerships, investment restrictions, operating risk, energy costs and hedging, environmental matters, insurance, capital investments, indebtedness, interest rate hedging, foreign operation and currency risks, taxation, harmonization of federal goods and services tax and provincial sales tax, government regulations, controls over financial accounting, legal and regulatory concerns, the nature of units of CAPREIT ("Trust Units") and of CAPREIT's subsidiary, CAPREIT Limited Partnership ("Exchangeable Units") (collectively, the "Units"), unitholder liability, liquidity and price fluctuation of Units, dilution, distributions, participation in CAPREIT's distribution reinvestment plan, potential conflicts of interest, dependence on key personnel, general economic conditions, competition for residents, competition for real property investments, continued growth and risks related to acquisitions. There can be no assurance the expectations of CAPREIT's Management will prove to be correct. These risks and uncertainties are more fully described in regulatory filings, including CAPREIT's Annual Information Form, which can be obtained on SEDAR at www.sedar.com, under CAPREIT's profile, as well as under Risks and Uncertainties section of the MD&A released on February 28, 2014. The information in this press release is based on information available to Management as of February 28, 2014. Subject to applicable law, CAPREIT does not undertake any obligation to publicly update or revise any forward-looking information.
SOURCE: Canadian Apartment Properties Real Estate Investment Trust
| SELECTED FINANCIAL INFORMATION | ||||
| Condensed Balance Sheets | ||||
| As at | December 31, 2013 | December 31, 2012 | ||
| ($ Thousands) | ||||
| Investment Properties | $ | 5,459,218 | $ | 4,826,355 |
| Total Assets | 5,558,934 | 4,921,546 | ||
| Mortgages Payable | 2,457,182 | 2,189,556 | ||
| Bank Indebtedness | 187,030 | 147,316 | ||
| Total Liabilities | 2,801,465 | 2,492,332 | ||
| Unitholders' Equity | 2,757,469 | 2,429,214 | ||
| Condensed Income Statements | |||||||||||||
| Three Months Ended | Year Ended | ||||||||||||
| December 31, | December 31, | ||||||||||||
| ($ Thousands) | 2013 | 2012 | 2013 | 2012 | |||||||||
| Net Operating Income | 66,033 | 62,651 | 273,854 | 237,916 | |||||||||
| Trust Expenses | (5,406 | ) | (4,399 | ) | (19,280 | ) | (13,904 | ) | |||||
| Unrealized Gain on Remeasurement of Investment Properties | 56,434 | 133,138 | 106,470 | 298,228 | |||||||||
| Realized Loss on Disposition of Investment Properties | 72 | (1,085 | ) | (811 | ) | (1,613 | ) | ||||||
| Remeasurement of Exchangeable Units | (126 | ) | (8 | ) | 537 | (904 | ) | ||||||
| Unit-based Compensation Expenses | (3,390 | ) | (1,840 | ) | 5,968 | (13,333 | ) | ||||||
| Interest on Mortgages Payable and Other Financing Costs | (24,337 | ) | (22,116 | ) | (95,197 | ) | (85,273 | ) | |||||
| Interest on Bank Indebtedness | (1,346 | ) | (2,742 | ) | (6,071 | ) | (6,954 | ) | |||||
| Interest on Exchangeable Units | (46 | ) | (73 | ) | (197 | ) | (354 | ) | |||||
| Other Income | 1,219 | 872 | 5,280 | 3,503 | |||||||||
| Amortization | (578 | ) | (564 | ) | (2,178 | ) | (2,195 | ) | |||||
| Unrealized and Realized Loss on Derivative Financial Instruments | (153 | ) | (852 | ) | (680 | ) | (2,854 | ) | |||||
| Loss on Foreign Currency Translation | 13 | - | (17 | ) | - | ||||||||
| Net Income | 88,389 | 162,982 | 267,678 | 412,263 | |||||||||
| Other Comprehensive Income (Loss) | $ | (489 | ) | $ | (37 | ) | $ | 1,317 | $ | 1,499 | |||
| Comprehensive Income | $ | 87,900 | $ | 162,945 | $ | 268,995 | $ | 413,762 | |||||
| Condensed Statements of Cash Flows | ||||||||||||||
| Three Months Ended | Year Ended | |||||||||||||
| December 31, | December 31, | |||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||
| ($ Thousands) | ||||||||||||||
| Cash Provided By Operating Activities: | ||||||||||||||
| Net Income | $ | 88,389 | $ | 162,982 | $ | 267,678 | $ | 412,263 | ||||||
| Items in Net Income Not Affecting Cash: | ||||||||||||||
| Changes in Non-cash Operating Assets and Liabilities | 25,412 | 7,632 | 7,979 | 6,382 | ||||||||||
| Realized and Unrealized Gain on Remeasurements | (56,227 | ) | (131,193 | ) | (105,516 | ) | (292,857 | ) | ||||||
| Gain on Sale of Investments | - | (290 | ) | (1,737 | ) | (1,455 | ) | |||||||
| Unit-based Compensation Expenses | 3,390 | 1,840 | (5,968 | ) | 13,333 | |||||||||
| Recovery of Deferred Income Taxes | - | - | - | - | ||||||||||
| Items Related to Financing and Investing Activities | 23,920 | 23,189 | 93,607 | 85,388 | ||||||||||
| Other | (754 | ) | 1,196 | 4,237 | 5,540 | |||||||||
| Cash Provided By Operating Activities | 84,130 | 65,356 | 260,280 | 228,594 | ||||||||||
| Cash Used In Investing Activities | ||||||||||||||
| Acquisitions | (97,686 | ) | (99,776 | ) | (416,565 | ) | (445,682 | ) | ||||||
| Capital Investments | (55,934 | ) | (34,255 | ) | (158,367 | ) | (131,280 | ) | ||||||
| Disposition of Investments | - | 1,299 | 7,815 | 6,830 | ||||||||||
| Dispositions | 73 | 29,944 | 57,672 | 55,644 | ||||||||||
| Other | 336 | 605 | 190 | 2,831 | ||||||||||
| Cash Used In Investing Activities | (153,211 | ) | (102,183 | ) | (509,255 | ) | (511,657 | ) | ||||||
| Cash Provided By Financing Activities | ||||||||||||||
| Mortgages, Net of Financing Costs | 14,672 | 28,176 | 251,455 | 45,358 | ||||||||||
| Bank Indebtedness | (41,926 | ) | (118,089 | ) | 39,714 | 73,184 | ||||||||
| Interest Paid | (24,236 | ) | (23,892 | ) | (94,905 | ) | (88,722 | ) | ||||||
| Hedge Settlement | - | (6,510 | ) | (3,492 | ) | (18,377 | ) | |||||||
| Proceeds on Issuance of Units | 142,873 | 177,538 | 144,169 | 347,570 | ||||||||||
| Distributions, Net of DRIP and Other | (22,302 | ) | (20,396 | ) | (87,966 | ) | (75,950 | ) | ||||||
| Cash Provided By Financing Activities | 69,081 | 36,827 | 248,975 | 283,063 | ||||||||||
| Changes in Cash and Cash Equivalents During the Period | - | - | - | - | ||||||||||
| Cash and Cash Equivalents, Beginning of Period | - | - | - | - | ||||||||||
| Cash and Cash Equivalents, End of Period | $ | - | $ | - | $ | - | $ | - | ||||||
| SELECTED NON-IFRS FINANCIAL MEASURES | |||||||||||||
| Reconciliation of Net Income to FFO and to NFFO | |||||||||||||
| Three Months Ended | Year Ended | ||||||||||||
| December 31, | December 31, | ||||||||||||
| 2013 | 2012 | 2013 | 2012 | ||||||||||
| ($ Thousands, except per Unit amounts) | |||||||||||||
| Net Income | $ | 88,389 | $ | 162,982 | $ | 267,678 | $ | 412,263 | |||||
| Adjustments: | |||||||||||||
| Unrealized Gain on Remeasurement of Investment Properties | (56,434 | ) | (133,138 | ) | (106,470 | ) | (298,228 | ) | |||||
| Realized Loss on Disposition of Investment Properties | (72 | ) | 1,085 | 811 | 1,613 | ||||||||
| Remeasurement of Exchangeable Units | 126 | 8 | (537 | ) | 904 | ||||||||
| Remeasurement of Unit-based Compensation Liabilities | 2,696 | 669 | (8,493 | ) | 10,053 | ||||||||
| Interest on Exchangeable Units | 46 | 73 | 197 | 354 | |||||||||
| Amortization of Property, Plant and Equipment | 578 | 564 | 2,178 | 2,195 | |||||||||
| FFO | $ | 35,329 | $ | 32,243 | $ | 155,364 | $ | 129,154 | |||||
| Adjustments: | |||||||||||||
| Unrealized and Realized Loss on Derivative Financial Instruments | 153 | 852 | 680 | 2,854 | |||||||||
| Amortization of Loss from AOCL to Interest and Other Financing Costs | 828 | 754 | 3,265 | 2,000 | |||||||||
| Net Mortgage Prepayment Cost | 47 | - | 1,786 | - | |||||||||
| Realized Gain on Sale of Investments | - | (293 | ) | (1,737 | ) | (1,455 | ) | ||||||
| Loss on Foreign Currency Translation | (13 | ) | - | 17 | - | ||||||||
| NFFO | $ | 36,344 | $ | 33,556 | $ | 159,375 | $ | 132,553 | |||||
| NFFO per Unit - Basic | $ | 0.338 | $ | 0.356 | $ | 1.562 | $ | 1.486 | |||||
| NFFO per Unit - Diluted | $ | 0.334 | $ | 0.351 | $ | 1.540 | $ | 1.463 | |||||
| Total Distributions Declared (1) | $ | 31,895 | 27,272 | $ | 119,256 | $ | 101,210 | ||||||
| NFFO Payout Ratio (2) | 87.8 | % | 81.3 | % | 74.8 | % | 76.4 | % | |||||
| Net Distributions Paid (1) | $ | 22,738 | $ | 21,069 | $ | 88,265 | $ | 77,836 | |||||
| Excess NFFO Over Net Distributions Paid | $ | 13,606 | $ | 12,487 | $ | 71,110 | $ | 54,717 | |||||
| Effective NFFO Payout Ratio (3) | 62.6 | % | 62.8 | % | 55.4 | % | 58.7 | % | |||||
| (1) | For a description of distributions declared and net distributions paid, see the Non-IFRS Financial Measures section in the MD&A for the year ended December 31, 2013. |
| (2) | The payout ratio compares distributions declared to NFFO. |
| (3) | The effective payout ratio compares net distributions paid to NFFO. |
| Reconciliation of NFFO to AFFO | |||||||||||||
| Three Months Ended | Year Ended | ||||||||||||
| December 31 | December 31 | ||||||||||||
| 2013 | 2012 | 2013 | 2012 | ||||||||||
| ($ Thousands, except per Unit amounts) | |||||||||||||
| NFFO | $ | 36,344 | $ | 33,556 | $ | 159,375 | $ | 132,553 | |||||
| Adjustments: | |||||||||||||
| Provision for Maintenance Property Capital Investments (1) | (3,774 | ) | (3,440 | ) | (15,097 | ) | (13,758 | ) | |||||
| Amortization of Fair Value on Grant Date of Unit-based Compensation | 694 | 1,171 | 2,525 | 3,280 | |||||||||
| AFFO | $ | 33,264 | $ | 31,287 | $ | 146,803 | $ | 122,075 | |||||
| AFFO per Unit - Basic | $ | 0.310 | $ | 0.332 | $ | 1.438 | $ | 1.368 | |||||
| AFFO per Unit - Diluted | $ | 0.306 | $ | 0.327 | $ | 1.419 | $ | 1.348 | |||||
| Distributions Declared (2) | $ | 31,895 | $ | 27,272 | $ | 119,256 | $ | 101,210 | |||||
| AFFO Payout Ratio (3) | 95.9 | % | 87.2 | % | 81.2 | % | 82.9 | % | |||||
| Net Distributions Paid (2) | $ | 22,738 | $ | 21,069 | $ | 88,265 | $ | 77,836 | |||||
| Excess AFFO over Net Distributions Paid | $ | 10,526 | $ | 10,218 | $ | 58,538 | $ | 44,239 | |||||
| Effective AFFO Payout Ratio (4) | 68.4 | % | 67.3 | % | 60.1 | % | 63.8 | % | |||||
| (1) | An industry based estimate (see the Non-IFRS Measures section in the MD&A for the year ended December 31, 2013). |
| (2) | For a description of distributions declared and net distributions paid, see the Non-IFRS Financial Measures section in the MD&A for the year ended December 31, 2013. |
| (3) | The payout ratio compares distributions declared to AFFO. |
| (4) | The effective payout ratio compares net distributions paid to AFFO. |
Contact Information:
Mr. Michael Stein
Chairman
(416) 861-5788
CAPREIT
Mr. Thomas Schwartz
President & CEO
(416) 861-9404
CAPREIT
Mr. Scott Cryer
Chief Financial Officer
(416) 861-5771
www.capreit.net