TORONTO, ONTARIO--(Marketwire - Nov. 8, 2012) - Canadian Apartment Properties Real Estate Investment Trust ("CAPREIT") (TSX:CAR.UN) announced today strong operating and financial results for the three and nine months ended September 30, 2012.
| Three Months Ended | Nine Months Ended | |||||||||||
| September 30 | September 30 | |||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||
| Operating Revenues (000s) | $ | 109,118 | $ | 92,824 | $ | 300,312 | $ | 267,391 | ||||
| Net Operating Income ("NOI") (000s) (1) | $ | 65,813 | $ | 55,039 | $ | 175,265 | $ | 153,594 | ||||
| NOI Margin (1) | 60.3 | % | 59.3 | % | 58.4 | % | 57.4 | % | ||||
| Normalized Funds From Operations ("NFFO") (000s) (1) | $ | 39,866 | $ | 29,252 | $ | 98,997 | $ | 78,652 | ||||
| NFFO Per Unit - Basic (1) | $ | 0.435 | $ | 0.388 | $ | 1.131 | $ | 1.047 | ||||
| Weighted Average Number of Units - Basic (000s) | 91,667 | 75,397 | 87,538 | 75,130 | ||||||||
| NFFO Payout Ratio (1) | 65.3 | % | 72.0 | % | 74.7 | % | 80.0 | % | ||||
| (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. |
- Average monthly rents for all residential properties up 1.8% as at September 30, 2012 compared to the same period last year with occupancies remaining strong at 98.2%.
- Average monthly rents for stabilized residential properties up 2.7% as at September 30, 2012 compared to the same period last year with occupancies at nearly full levels at 98.5%.
- Stabilized NOI up 4.5% in Q3 2012 resulting from 2.5% increase in stabilized operating revenues and lower operating costs. YTD 2012 stabilized NOI up 4.3%.
- Q3 and YTD 2012 NOI increased 19.6% and 14.1%, respectively compared to the same period last year with NOI margin rising to 60.3% and 58.4%, respectively.
- Q3 2012 and YTD 2012 NFFO up 36.3% and 25.9%, respectively.
- Strong accretive growth as Q3 2012 and YTD 2012 NFFO per Unit increased 12.1% and 8.0%, respectively, despite 22% and 17% increase in the weighted average number of Units outstanding.
- Closed or committed $387.4 million of mortgage refinancings to date at a weighted average interest rate and term to maturity of 2.91% and 8.9 years, respectively, which is expected to produce significant future interest rate savings.
- During Q3 2012, completed the acquisition of two apartment properties in Calgary, Alberta totaling 405 residential suites, for total acquisition costs of $69.5 million and the purchase of five MHC sites in Bowmanville and Grand Bend, Ontario, for total acquisition costs of $0.5 million.
- On October 31, 2012, CAPREIT disposed of five apartment buildings containing 438 suites located in Mississauga, Oakville and Toronto, Ontario for a sale price of approximately $60.7 million. Mortgages of approximately $29.0 million were discharged and the balance applied to pay down the Bridge Loan.
- On November 1, 2012, CAPREIT completed the acquisition of the landmark Olympic Village property in Montréal, Québec, containing 980 residential suites and 237,000 square feet of commercial and retail space for a purchase price of approximately $176.5 million and the assumption of a first mortgage of approximately $82.0 million bearing a stated interest rate of 4.39% maturing in September 2013. The net acquisition amount was funded from CAPREIT's Bridge Loan.
- With this recent acquisition, CAPREIT's total suites and sites acquired in 2012 is 6,984 with disposition of 773 suites, resulting in a net acquisition of 6,211 suites and sites.
"Strong and accretive organic growth continued in all our key operating and financial metrics during the third quarter and we are confident 2012 will be another record year for CAPREIT," commented Thomas Schwartz, President and CEO. "In addition, our portfolio was expanded and strengthened with key acquisitions during and subsequent to the period that we are confident will contribute to further increases in cash flows over the long term."
| PORTFOLIO OPERATING RESULTS | ||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||
| September 30 | September 30 | |||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||
| Overall Portfolio Occupancy (1) | 98.2 | % | 98.8 | % | ||||||||
| Overall Portfolio Average Monthly Rents (1),(2) | $ | 972 | $ | 991 | ||||||||
| Operating Revenues (000s) | $ | 109,118 | $ | 92,824 | $ | 300,312 | $ | 267,391 | ||||
| Net Rental Revenue Run-Rate (000s) (1),(3),(4) | $ | 421,539 | $ | 358,557 | ||||||||
| Operating Expenses (000s) | $ | 43,305 | $ | 37,785 | $ | 125,047 | $ | 113,797 | ||||
| NOI (000s) (4) | $ | 65,813 | $ | 55,039 | $ | 175,265 | $ | 153,594 | ||||
| NOI Margin (4) | 60.3 | % | 59.3 | % | 58.4 | % | 57.4 | % | ||||
| Number of Suites and Sites Acquired | 410 | 1,040 | 6,004 | 2,467 | ||||||||
| Number of Suites Disposed | - | - | 335 | 143 | ||||||||
| (1) | As at September 30. |
| (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 three and nine months ended September 30, 2012. |
| (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 three and nine months ended September 30, 2012, total operating revenues increased by 17.6% and 12.3%, respectively, compared to the same periods last year primarily due to the contribution from acquisitions, higher rent guideline increases, increased average monthly rents in the residential suite portfolio, and continuing strong occupancies. For the three and nine months ended September 30, 2012, ancillary revenues, including parking, laundry and antenna income, rose by 14.8% and 6.3%, 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 based on the average monthly rents in place on CAPREIT's share of residential suites and sites as at September 30, 2012 increased to $421.5 million, up 17.6% from $358.6 million as of September 30, 2011 primarily due to acquisitions completed within the past twelve months and strong rental growth. Net rental revenue for the twelve months ended September 30, 2012 was $372.7 million (2011 - $334.8 million).
Portfolio Average Monthly Rents ("AMR")
| Total Portfolio | Properties Owned Prior to September 30, 2011 |
|||||||||||
| As at September 30, | 2012 | 2011 | 2012 | 2011 (1) | ||||||||
| AMR | Occ. % | AMR | Occ. % | AMR | Occ. % | AMR | Occ. % | |||||
| Average Residential Suites | $ | 1,026 | 98.2 | $ | 1,008 | 98.7 | $ | 1,034 | 98.5 | $ | 1,007 | 98.7 |
| Average MHC Land Lease Sites | $ | 435 | 98.8 | $ | 633 | 100.0 | $ | 628 | 99.8 | $ | 633 | 100.0 |
| Overall Portfolio Average | $ | 972 | 98.2 | $ | 991 | 98.8 | $ | 1,016 | 98.6 | $ | 990 | 98.8 |
| (1) | Prior period's comparable AMR and occupancy have been restated for properties disposed of between October 1, 2011 and September 30, 2012. |
Average monthly rents decreased slightly by 1.9% as at September 30, 2012 compared to the same period last year due to the acquisition of MHC land lease sites in the second quarter of 2012 in certain lower rent geographic regions, while occupancy remained at nearly full levels at 98.2% due to ongoing successful sales and marketing strategies and continued strength in the residential rental sector in the majority of CAPREIT's regional markets.
| Suite Turnovers and Lease Renewals | ||||||
| For the Three Months Ended September 30, | 2012 | 2011 | ||||
| Change in AMR | % Turnovers | Change in AMR | % Turnovers | |||
| $ | % | & Renewals (1) | $ | % | & Renewals (1) | |
| Suite Turnovers | 21.7 | 2.1 | 9.5 | 16.0 | 1.6 | 10.7 |
| Lease Renewals | 32.8 | 3.2 | 25.4 | 15.0 | 1.5 | 25.9 |
| Weighted Average of Turnovers and Renewals | 29.8 | 2.9 | 15.3 | 1.5 | ||
| For the Nine Months Ended September 30, | 2012 | 2011 | ||||
| Change in AMR | % Turnovers | Change in AMR | % Turnovers | |||
| $ | % | & Renewals (1) | $ | % | & Renewals (1) | |
| Suite Turnovers | 21.7 | 2.1 | 20.9 | 11.9 | 1.2 | 24.2 |
| Lease Renewals | 34.3 | 3.3 | 55.7 | 14.3 | 1.4 | 54.6 |
| Weighted Average of Turnovers and Renewals | 30.8 | 3.0 | 13.5 | 1.3 | ||
| (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 higher rate of growth in average monthly rents on lease renewals during the periods is primarily due to the higher guideline increases for 2012 (Ontario - 3.1%, British Columbia - 4.3%), which compares more favourably to the permitted guideline increases in 2011 (Ontario - 0.7%, British Columbia - 2.3%) and above guideline increases ("AGI") applied. Management continues to pursue applications for AGIs where it believes increases are supported by market conditions above the annual guideline to raise average monthly rents on lease renewals. For 2013, the permitted guideline increase in Ontario and British Columbia has been set at 2.5% and 3.8%, respectively.
Operating Expenses
Operating expenses as a percentage of revenues decreased for the three and nine months ended September 30, 2012 to 39.7% from 40.7% and 41.6% from 42.6% respectively, for the same periods last year. The improvement is primarily due to: (i) the diversification of the portfolio into regions with lower taxation rates, (ii) lower utility costs, and (iii) successful energy-saving initiatives and enhanced procurement strategies.
Net Operating Income
In the third quarter of 2012, NOI improved by $10.8 million or 19.6%, and the NOI margin increased to 60.3% from 59.3% for the same period last year. For the first nine months of 2012, NOI increased by $21.7 million or 14.1%, and the NOI margin improved to 58.4% from 57.4% for the same period last year. The significant improvements in NOI were primarily the result of acquisitions completed in the last 12 month period, and the combination of higher operating revenues and lower operating expenses.
For the three and nine months ended September 30, 2012, operating revenues for stabilized suites and sites increased 2.5% and 2.2%, respectively, and operating expenses decreased 0.6% and 0.7%, respectively, compared to the same periods last year. For the three and nine months ended September 30 2012, stabilized NOI increased by a significant 4.5% and 4.3%, respectively, compared to the same periods last year.
| NON-IFRS FINANCIAL MEASURES | ||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||
| September 30, | September 30, | |||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||
| NFFO (000s) | $ | 39,866 | 29,252 | $ | 98,997 | $ | 78,652 | |||||
| NFFO Per Unit - Basic | $ | 0.435 | $ | 0.388 | $ | 1.131 | $ | 1.047 | ||||
| Cash Distributions Per Unit | $ | 0.277 | $ | 0.270 | $ | 0.817 | $ | 0.810 | ||||
| NFFO Payout Ratio | 65.3 | % | 72.0 | % | 74.7 | % | 80.0 | % | ||||
| NFFO Effective Payout Ratio | 50.9 | % | 56.6 | % | 57.3 | % | 62.4 | % | ||||
Normalized Funds From Operations
NFFO is not a financial measure determined by IFRS, and is calculated by excluding from FFO the effects of certain non-recurring items, including changes in fair value of hedging instruments, amortization of losses on certain hedging instruments, and losses incurred on the amendment of natural gas contracts. NFFO, increased by 36.3% and 25.9% for the three and nine months ended September 30, 2012, respectively, compared to the same periods last year. The increase was primarily due to the contribution from acquisitions, and higher operating revenues, resulting from Management's sales and marketing programs.
For the nine months ended September 30, 2012, basic NFFO per Unit increased by 8.0% compared to the same period last year despite the approximate 17% increase in the weighted average number of Units outstanding. For the three months ended September 30, 2012, basic NFFO per Unit increased by 12.1% compared to the same period last year due primarily to the strong increase in NFFO, despite the approximate 22% increase in the weighted average number of Units outstanding. Management expects FFO and NFFO per Unit, and the related payout ratios, to improve in the medium term as a result of the full NOI contribution from recent acquisitions.
NFFO effective payout ratio for the three and nine months ended September 30, 2012 improved by 5.7% and 5.1%, respectively primarily due to higher NFFO during the current year and by higher participation in distributions reinvested. Management believes NFFO will be sufficient to fund CAPREIT's distributions on an annualized basis.
| LIQUIDITY AND LEVERAGE | ||||
| As at September 30, | 2012 | 2011 | ||
| Total Debt to Gross Book Value | 50.97 | % | 55.35 | % |
| Total Debt to Gross Historical Cost (1) | 59.94 | % | 62.22 | % |
| Total Debt to Total Capitalization | 50.24 | % | 54.48 | % |
| Debt Service Coverage Ratio (times) (2) | 1.49 | 1.36 | ||
| Interest Coverage Ratio (times) (2) | 2.46 | 2.17 | ||
| Weighted Average Mortgage Interest Rate (3) | 4.03 | % | 4.63 | % |
| Weighted Average Mortgage Term to Maturity (years) | 5.3 | 5.5 | ||
| (1) | Based on historical cost of investment properties. |
| (2) | Based on the trailing four quarters ended September 30, 2012. |
| (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 $24.0 million included in Accumulated Other Comprehensive Loss ("AOCL"), the effective portfolio weighted average interest rate at September 30, 2012 would be 4.19% (September 30, 2011 - 4.71%). |
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:
- The ratio of total debt to gross book value as at September 30, 2012 improved to 50.97% compared to 55.35% for the same period last year;
- Debt service and interest coverage ratios for the four quarters ended September 30, 2012 improved to 1.49 times and 2.46 times compared to 1.36 times and 2.17 times, respectively, for the same period last year;
- At September 30, 2012, 93.1% (September 30, 2011 - 96.4%) of CAPREIT's mortgage portfolio was insured by the Canada Mortgage and Housing Corporation ("CMHC"), excluding the mortgages on CAPREIT's manufactured home communities land lease sites, resulting in improved spreads on mortgages and overall lower interest costs than conventional mortgages. During the current year, on certain acquisitions CAPREIT has assumed conventional mortgages resulting in a decrease of CAPREIT's mortgage portfolio insured by CMHC compared to the same period last year.
- The effective portfolio weighted average interest rate on mortgages has steadily declined from 4.63% as at September 30, 2011, to 4.03% as at September 30, 2012, which will result in significant interest rate savings in future years;
- Closed or committed mortgage refinancings for $387.4 million, including $258.4 million for renewals of existing mortgages and $129 million for additional top up financing as at November 8, 2012 with a weighted average term to maturity of 8.9 years, and at a weighted average rate of 2.91%. Management expects to raise between $400 million and $425 million in total mortgage renewals and refinancings in 2012.
- CAPREIT renewed and amended it's Credit Facilities aggregating $420 million effective June 30, 2012, which comprise a revolving three-year Acquisition and Operating Facility, and a Bridge Loan, subject to compliance with the various provisions of the Credit Facilities in order to fund operations, acquisitions, capital improvements, letters of credit and other uses. On renewal, the Credit Facilities agreement was amended, to combine the Acquisition and Operating Facility and the Land Lease Facility into one credit facility for a total of $280 million. In addition, CAPREIT secured a Bridge Loan aggregating to $140 million in conjunction to renewing CAPREIT's existing Credit Facilities, in order to fund specific acquisitions. The Bridge Loan is a term credit and any principal amount under the facility that is repaid may not be re-borrowed. Its maturity date is a year from the initial drawdown of the advance, which was August 31, 2012.
Property Capital Investment Plan
During the nine months ended September 30, 2012 CAPREIT made property capital investments of $84.6 million as compared to $75.3 million for the same period last year. For the full 2012 year, CAPREIT expects to complete property capital investments of approximately $130 million to $140 million, including approximately $12.5 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 Events
On October 31, 2012, CAPREIT disposed of five apartment buildings containing 438 suites located in Mississauga, Oakville and Toronto, Ontario for a sale price of approximately $60.7 million. Mortgages of approximately $29.0 million were discharged and the balance applied to pay down the Bridge Loan.
On November 1, 2012, CAPREIT completed the acquisition of the landmark Olympic Village property in Montréal, Québec, containing 980 residential suites and 237,000 square feet of commercial and retail space for a purchase price of approximately $176.5 million and the assumption of a first mortgage of approximately $82.0 million bearing a stated interest rate of 4.39% maturing in September 2013. The net acquisition amount will be funded from CAPREIT's Bridge Loan.
Additional Information
More detailed information and analysis is included in CAPREIT's unaudited condensed consolidated interim financial statements and MD&A for the three and nine months ended September 30, 2012, 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 Scott Cryer, Chief Financial Officer, will be held Friday, November 9, 2012 at 10.00 am EST. The telephone numbers for the conference call are: Local/International: (416) 340-2218, North American Toll Free: (877) 240-9772.
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 6451530#. The Instant Replay will be available until midnight, November 16, 2012. 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 located in and near major urban centres across Canada. At September 30, 2012, CAPREIT had owning interests in 36,683 residential units, comprised of 33,313 residential suites and 14 manufactured home communities ("MHC") comprising 3,370 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 November 8, 2012, 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 economy 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 conditions within the real estate market, including competition for acquisitions, will become more favourable; 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, 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 November 8, 2012. The information in this press release is based on information available to Management as of November 8, 2012. 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 | September 30, 2012 | December 31, 2011 | ||
| ($ Thousands) | ||||
| Investment Properties | $ | 4,522,253 | $ | 3,713,737 |
| Total Assets | 4,628,317 | 3,804,650 | ||
| Mortgages Payable | 2,105,160 | 1,848,190 | ||
| Bank Indebtedness | 265,405 | 74,132 | ||
| Total Liabilities | 2,518,890 | 2,063,987 | ||
| Unitholders' Equity | 2,109,427 | 1,740,663 | ||
| Condensed Income Statements | |||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||
| September 30, | September 30, | ||||||||||||
| ($ Thousands) | 2012 | 2011 | 2012 | 2011 | |||||||||
| Net Operating Income | 65,813 | 55,039 | 175,265 | 153,594 | |||||||||
| Trust Expenses | (2,699 | ) | (2,851 | ) | (9,505 | ) | (10,150 | ) | |||||
| Unrealized Gain on Remeasurement of Investment Properties | 61,458 | 1,726 | 165,090 | 27,057 | |||||||||
| Realized Loss on Disposition of Investment Properties | - | - | (528 | ) | (95 | ) | |||||||
| Remeasurement of Exchangeable Units | (264 | ) | (724 | ) | (896 | ) | (1,629 | ) | |||||
| Unit-based Compensation Expenses | (4,139 | ) | (6,433 | ) | (11,493 | ) | (12,373 | ) | |||||
| Interest on Mortgages Payable and Other Financing Costs | (21,486 | ) | (21,546 | ) | (63,157 | ) | (61,571 | ) | |||||
| Interest on Bank Indebtedness | (2,219 | ) | (1,896 | ) | (4,212 | ) | (4,447 | ) | |||||
| Interest on Exchangeable Units | (77 | ) | (111 | ) | (281 | ) | (333 | ) | |||||
| Other Income | 1,416 | 465 | 2,631 | 1,395 | |||||||||
| Amortization | (565 | ) | (396 | ) | (1,631 | ) | (1,193 | ) | |||||
| Severance and Other Employee Costs | - | - | - | (1,352 | ) | ||||||||
| Unrealized and Realized (Loss) Gain on Derivative Financial Instruments | (535 | ) | (293 | ) | (2,002 | ) | 913 | ||||||
| Net Income | 96,703 | 22,980 | 249,281 | 89,816 | |||||||||
| Other Comprehensive (Loss) Income | $ | (705 | ) | $ | (17,191 | ) | $ | 1,536 | $ | (13,882 | ) | ||
| Comprehensive Income | $ | 95,998 | $ | 5,789 | $ | 250,817 | $ | 75,934 | |||||
| Condensed Statements of Cash Flows | ||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||
| September 30, | September 30, | |||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||
| ($ Thousands) | ||||||||||||||
| Cash Provided By Operating Activities: | ||||||||||||||
| Net Income | $ | 96,703 | $ | 22,980 | $ | 249,281 | $ | 89,816 | ||||||
| Items in Net Income Not Affecting Cash: | ||||||||||||||
| Changes in Non-cash Operating Assets and Liabilities | (676 | ) | 5,298 | (13,117 | ) | (3,024 | ) | |||||||
| Realized and Unrealized Gain on Remeasurements | (60,659 | ) | (709 | ) | (161,664 | ) | (26,256 | ) | ||||||
| Gain on Sale of Investments | (975 | ) | - | (1,165 | ) | - | ||||||||
| Unit-based Compensation Expenses | 4,139 | 6,433 | 11,493 | 12,373 | ||||||||||
| Items Related to Financing and Investing Activities | 22,420 | 21,127 | 62,199 | 60,486 | ||||||||||
| Other | 949 | 1,972 | 4,344 | 5,383 | ||||||||||
| Cash Provided By Operating Activities | 61,901 | 57,101 | 151,371 | 138,778 | ||||||||||
| Cash Used In Investing Activities | ||||||||||||||
| Acquisitions | (38,020 | ) | (40,642 | ) | (345,906 | ) | (237,554 | ) | ||||||
| Capital Investments | (51,018 | ) | (35,966 | ) | (97,025 | ) | (80,712 | ) | ||||||
| Disposition of Investments | 4,428 | - | 5,531 | - | ||||||||||
| Dispositions | - | - | 25,700 | 3,609 | ||||||||||
| Other | 1,185 | 181 | 2,226 | 1,051 | ||||||||||
| Cash Used In Investing Activities | (83,425 | ) | (76,427 | ) | (409,474 | ) | (313,606 | ) | ||||||
| Cash Provided By Financing Activities | ||||||||||||||
| Mortgages, Net of Financing Costs | 32,308 | 2,888 | 17,182 | 118,940 | ||||||||||
| Bank Indebtedness, Net | 32,257 | 53,822 | 191,273 | 159,474 | ||||||||||
| Interest Paid | (23,836 | ) | (21,592 | ) | (64,830 | ) | (61,881 | ) | ||||||
| Proceeds on Issuance of Units | 683 | 476 | 170,032 | 2,610 | ||||||||||
| Distributions, Net of DRIP and Other | (19,888 | ) | (16,268 | ) | (55,554 | ) | (48,665 | ) | ||||||
| Cash Provided By Financing Activities | 21,524 | 19,326 | 258,103 | 170,478 | ||||||||||
| Changes in Cash and Cash Equivalents During the Period | - | - | - | (4,350 | ) | |||||||||
| Cash and Cash Equivalents, Beginning of Period | - | - | - | 4,350 | ||||||||||
| Cash and Cash Equivalents, End of Period | $ | - | $ | - | $ | - | $ | - | ||||||
| SELECTED NON-IFRS FINANCIAL MEASURES | |||||||||||||
| Reconciliation of Net Income to FFO and to NFFO | |||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||
| September 30, | September 30, | ||||||||||||
| 2012 | 2011 | 2012 | 2011 | ||||||||||
| ($ Thousands, except per Unit amounts) | |||||||||||||
| Net Income | $ | 96,703 | $ | 22,980 | $ | 249,281 | $ | 89,816 | |||||
| Adjustments: | |||||||||||||
| Unrealized Gain on Remeasurement of Investment Properties | (61,458 | ) | (1,726 | ) | (165,090 | ) | (27,057 | ) | |||||
| Realized Loss on Disposition of Investment Properties | - | - | 528 | 95 | |||||||||
| Remeasurement of Exchangeable Units | 264 | 724 | 896 | 1,629 | |||||||||
| Remeasurement of Unit-based Compensation Liabilities | 3,591 | 6,225 | 9,384 | 11,466 | |||||||||
| Interest on Exchangeable Units | 77 | 111 | 281 | 333 | |||||||||
| Amortization of Property, Plant and Equipment | 565 | 375 | 1,631 | 1,130 | |||||||||
| FFO | $ | 39,742 | $ | 28,689 | $ | 96,911 | $ | 77,412 | |||||
| Adjustments: | |||||||||||||
| Unrealized Loss on Derivative Financial Instruments | 535 | 293 | 2,002 | (913 | ) | ||||||||
| Amortization of Loss on Derivative Financial Instruments Included in Mortgage Interest | 574 | 270 | 1,246 | 801 | |||||||||
| Gain on Investment | (985 | ) | - | (1,162 | ) | - | |||||||
| Severance and Other Employee Costs | - | - | - | 1,352 | |||||||||
| NFFO | $ | 39,866 | $ | 29,252 | $ | 98,997 | $ | 78,652 | |||||
| NFFO per Unit - Basic | $ | 0.435 | $ | 0.388 | $ | 1.131 | $ | 1.047 | |||||
| NFFO per Unit - Diluted | $ | 0.428 | $ | 0.383 | $ | 1.114 | $ | 1.035 | |||||
| Total Distributions Declared (1) | $ | 26,029 | 21,052 | $ | 73,937 | $ | 62,915 | ||||||
| NFFO Payout Ratio (2) | 65.3 | % | 72.0 | % | 74.7 | % | 80.0 | % | |||||
| Net Distributions Paid (1) | $ | 20,281 | $ | 16,543 | $ | 56,768 | $ | 49,072 | |||||
| Excess NFFO Over Net Distributions Paid | $ | 19,585 | $ | 12,709 | $ | 42,229 | $ | 29,580 | |||||
| Effective NFFO Payout Ratio (3) | 50.9 | % | 56.6 | % | 57.3 | % | 62.4 | % | |||||
| (1) | For a description of distributions declared and net distributions paid, see the Non-IFRS Financial Measures section in the MD&A for the three and nine months ended September 30, 2012. |
| (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 | Nine Months Ended | ||||||||||||
| September 30 | September 30 | ||||||||||||
| 2012 | 2011 | 2012 | 2011 | ||||||||||
| ($ Thousands, except per Unit amounts) | |||||||||||||
| NFFO | $ | 39,866 | $ | 29,252 | $ | 98,997 | $ | 78,652 | |||||
| Adjustments: | |||||||||||||
| Provision for Maintenance Property Capital Investments (1) | (3,372 | ) | (3,048 | ) | (10,115 | ) | (9,145 | ) | |||||
| Amortization of Fair Value on Grant Date of Unit-based Compensation | 548 | 200 | 2,109 | 885 | |||||||||
| AFFO | $ | 37,042 | $ | 26,404 | $ | 90,991 | $ | 70,392 | |||||
| AFFO per Unit - Basic | $ | 0.404 | $ | 0.350 | $ | 1.039 | $ | 0.937 | |||||
| AFFO per Unit - Diluted | $ | 0.398 | $ | 0.346 | $ | 1.024 | $ | 0.926 | |||||
| Distributions Declared (2) | $ | 26,029 | $ | 21,052 | $ | 73,937 | $ | 62,915 | |||||
| AFFO Payout Ratio (3) | 70.3 | % | 79.7 | % | 81.3 | % | 89.4 | % | |||||
| Net Distributions Paid (2) | $ | 20,281 | $ | 16,543 | $ | 56,768 | $ | 49,072 | |||||
| Excess AFFO over Net Distributions Paid | $ | 16,761 | $ | 9,861 | $ | 34,223 | $ | 21,320 | |||||
| Effective AFFO Payout Ratio (4) | 54.8 | % | 62.7 | % | 62.4 | % | 69.7 | % | |||||
| (1) | An industry based estimate (see the Non-IFRS Measures section in the MD&A for the three and nine months ended September 30, 2012). |
| (2) | For a description of distributions declared and net distributions paid, see the Non-IFRS Financial Measures section in the MD&A for the three and nine months ended September 30, 2012. |
| (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