TORONTO, ONTARIO -- (Marketwired) -- 08/08/14 -- Canadian Apartment Properties Real Estate Investment Trust ("CAPREIT") (TSX: CAR.UN) announced today strong operating and financial results for the three and six months ended June 30, 2014.
Three Months Ended Six Months Ended
June 30 June 30
2014 2013 2014 2013
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Operating Revenues
(000s) $ 125,411 $ 117,686 $ 251,944 $ 233,010
Net Operating Income
("NOI") (000s) (1) $ 78,089 $ 71,475 $ 149,464 $ 134,966
NOI Margin (1) 62.3% 60.7% 59.3% 57.9%
Normalized Funds From
Operations ("NFFO")
(000s) (1) $ 47,113 $ 42,582 $ 90,026 $ 78,768
NFFO Per Unit - Basic
(1) $ 0.431 $ 0.425 $ 0.826 $ 0.787
Weighted Average Number
of Units - Basic (000s) 109,211 100,230 108,964 100,086
NFFO Payout Ratio (1) 68.9% 68.0% 71.7% 73.2%
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(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 6.6% and 8.1% increase in
revenues in second quarter and first six months of June 30, 2014,
respectively
-- Average monthly rents for same residential properties up 2.7% in 2014
compared to last year
-- Portfolio occupancy remains strong at 98.3%
-- NFFO up 10.6% in second quarter and 14.3% for six months ended June 30,
2014
-- Strong accretive growth as NFFO per Unit for six months ended June 30,
2014 up 5.0% despite 9% increase in the weighted average number of Units
outstanding.
-- Same property NOI up 5.4% for the three and six months ended June 30,
2014
-- NOI margin increased to 62.3% and 59.3%, respectively, for the three and
six months ended June 30, 2014
-- Closed mortgage refinancings (excluding acquisitions) for $413.8 million
in 2014, including $248.2 million for renewals of existing mortgages and
$165.5 million for additional top up financing with a weighted average
term to maturity of 10 years, and a weighted average interest rate of
3.38%.
"We generated yet another quarter of strong growth as same property NOI rose a significant 5.4% while our track record of making accretive acquisitions contributed to increased cash flows," commented Thomas Schwartz, President and CEO. "Looking ahead, we are confident our proven operational programs, energy management and purchasing systems will continue to enhance net operating income and NOI margins."
Three Months Ended Six Months Ended
June 30 June 30
2014 2013 2014 2013
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Overall Portfolio
Occupancy (1) 98.3% 98.4%
Overall Portfolio
Average Monthly Rents
(1),(2) $ 958 $ 989
Operating Revenues
(000s) $ 125,411 $ 117,686 $ 251,944 $ 233,010
Net Rental Revenue Run-
Rate (000s) (1),(3),(4) $ 477,905 $ 448,881
Operating Expenses
(000s) $ 47,322 $ 46,211 $ 102,480 $ 98,044
NOI (000s) (4) $ 78,089 $ 71,475 $ 149,464 $ 134,966
NOI Margin (4) 62.3% 60.7% 59.3% 57.9%
Number of Suites and
Sites Acquired - 510 - 773
Number of Suites
Disposed 338 - 338 -
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(1) As at June 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 year ended June 30, 2014.
(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 six months ended June 30, 2014, total operating revenues increased by 6.6% and 8.1%, 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 and six months ended June 30, 2014, ancillary revenues, including parking, laundry and antenna income, rose by 7.6% and 10.7%, 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 June 30, 2014 increased to $477.9 million, up 6.5% from $448.9 million as at June 30, 2013 primarily due to acquisitions completed within the past twelve months and strong increases in average monthly rents. Net rental revenue run-rate net of dispositions for the twelve months ended June 30, 2014 was $468.9 million (2013 - $429.6 million).
Portfolio Average Monthly Rents ("AMR")
Properties Owned Prior to
Total Portfolio June 30, 2013
As at June 30, 2014 2013 2014 2013(1)
Occ. Occ. Occ. Occ.
AMR % AMR % AMR % AMR %
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Average
Residential
Suites $ 1,069 98.4 $ 1,044 98.3 $ 1,072 98.4 $ 1,044 98.2
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Average MHC Land
Lease Sites $ 350 97.7 $ 446 99.4 $ 458 99.4 $ 446 99.4
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Overall Portfolio
Average $ 958 98.3 $ 989 98.4 $ 1,014 98.5 $ 988 98.3
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Prior period's comparable AMR and occupancy have been restated for
(1) properties disposed of since July 1, 2013.
Average monthly rents for residential suites increased by 2.4% to $1,069 and occupancy increased to 98.4% as at June 30, 2014 due to ongoing successful sales and marketing strategies and continued strength in the residential rental sector in the majority of CAPREIT's regional markets. For the MHC land lease portfolio, average monthly rents decreased to $350 as at June 30, 2014, compared to $446 as at June 30 2013, primarily due to the recent acquisitions in lower rent geographic regions. Occupancy for the MHC portfolio was 97.7% at June 30, 2014 compared to 99.4% the same period last year.
Average monthly rents for residential suites owned prior to June 30, 2013 increased as at June 30, 2014 to $1,072 from $1,044 as at June 30, 2013, an increase of 2.7% from the same period last year with occupancies rising to 98.4% from 98.2%.
Suite Turnovers and Lease Renewals
For the Three
Months Ended June
30, 2014 2013
% %
Turnovers Turnovers
Change in AMR & Change in AMR &
$ % Renewals(1) $ % Renewals(1)
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Suite Turnovers 34.4 3.2 7.2 25.8 2.4 7.4
Lease Renewals 17.2 1.6 20.5 28.7 2.7 19.4
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Weighted Average
of Turnovers and
Renewals 21.7 2.0 27.9 2.6
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For the Six Months
Ended June 30, 2014 2013
% %
Turnovers Turnovers
Change in AMR & Change in AMR &
$ % Renewals(1) $ % Renewals(1)
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Suite Turnovers 29.8 2.8 12.6 19.3 1.8 12.7
Lease Renewals 17.3 1.6 36.2 29.3 2.7 34.7
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Weighted Average
of Turnovers and
Renewals 20.5 1.9 26.6 2.5
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(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 2014 compared to the prior year is primarily due to the lower mandated guideline increases for 2014 (Ontario - 0.8%, British Columbia - 2.2%), compared to the higher guideline increases in 2013 (Ontario - 2.5%, British Columbia - 3.8%), partially offset by increases due to above guideline increases ("AGI") achieved in Ontario. However, increased portfolio diversification helped mitigate the lower guideline increases. Management continues to pursue AGI applications where it believes increases are supported by market conditions above the annual guideline to raise average monthly rents on lease renewals. For 2015, the permitted guideline increase in Ontario has been increased to 1.6%.
NON-IFRS FINANCIAL MEASURES
Operating Expenses
Three Months Ended Six Months Ended
June 30 June 30
($ Thousands) 2014 %(1) 2013 %(1) 2014 %(1) 2013 %(1)
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Operating
Expenses
Realty Taxes$ 13,749 11.0 $ 13,357 11.4 $ 27,959 11.1 $ 27,482 11.8
Utilities 10,832 8.6 9,983 8.5 28,812 11.4 25,599 11.0
Other (2) 22,741 18.1 22,871 19.4 45,709 18.2 44,963 19.3
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Total
Operating $
Expenses 47,322 37.7 $ 46,211 39.3 $102,480 40.7 $ 98,044 42.1
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(1) As a percentage of total operating revenues.
Comprises R&M, wages, general and administrative, insurance,
(2) advertising, and legal costs.
Operating Expenses
Overall operating expenses as a percentage of operating revenues improved to 37.7% and 40.7%, respectively, for the three and six months ended June 30, 2014 compared to 39.3% and 42.1% for the same period last year, due to lower realty taxes, R&M, and insurance costs partially offset by higher utility costs as a percentage of operating revenues.
Net Operating Income
In the three months ended June 30, 2014, NOI improved by $6.6 million or 9.3%, and the NOI margin increased to 62.3% from 60.7% for the same period last year. For the six months ended June 30, 2014, NOI increased by $14.5 million or 10.7%, and the NOI margin increased to 59.3% compared to 57.9% for the same period last year. The increase in NOI margin for the three and six months ended June 30, 2014 was primarily the result of higher operating revenues, lower realty taxes, R&M, and insurance costs partially offset by higher utility costs.
For the three and six months ended June 30, 2014, operating revenues for stabilized suites and sites increased 2.8% and 3.2% respectively, while operating expenses decreased 1.2% and increased 0.3%, respectively, compared to the same periods last year. As a result, for the three and six months ended June 30, 2014, stabilized NOI increased by a significant 5.4% and 5.4%, respectively, compared to the same periods last year.
NON-IFRS FINANCIAL MEASURES
Three Months Ended Six Months Ended
June 30, June 30,
2014 2013 2014 2013
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NFFO (000s) $ 47,113 42,582 $ 90,026 $ 78,768
NFFO Per Unit - Basic $ 0.431 $ 0.425 $ 0.826 $ 0.787
Cash Distributions Per
Unit $ 0.290 $ 0.283 $ 0.578 $ 0.563
NFFO Payout Ratio 68.9% 68.0% 71.7% 73.2%
NFFO Effective Payout
Ratio 47.3% 52.4% 48.9% 56.1%
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LIQUIDITY AND LEVERAGE
As at June 30, 2014 2013
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Total Debt to Gross Book Value 47.22% 48.42%
Total Debt to Gross Historical Cost (1) 56.79% 58.17%
Total Debt to Total Capitalization 51.23% 51.84%
Debt Service Coverage Ratio (times) (2) 1.59 1.56
Interest Coverage Ratio (times) (2) 2.71 2.61
Weighted Average Mortgage Interest Rate (3) 3.72% 3.81%
Weighted Average Mortgage Term to Maturity (years) 6.7 6.1
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(1) Based on historical cost of investment properties.
(2) Based on the trailing four quarters ended June 30, 2014.
Weighted average mortgage interest rate includes deferred financing
(3) costs and fair value adjustments on an effective interest basis.
Including the amortization of the realized component of the loss on
interest rate hedge settlement of $32.5 million included in
Accumulated Other Comprehensive Loss ('AOCL'), the effective
portfolio weighted average interest rate at June 30, 2014 would be
3.88% (June 30, 2013 - 4%).
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:
-- Maintained a conservative ratio of total debt to gross book value of
47.22% as at June 30, 2014;
-- Debt service and interest coverage ratios for the quarter ended June 30,
2014 improved to 1.59 times and 2.71 times, respectively, compared to
1.56 times and 2.61 times, respectively, for the same period last year;
-- As at June 30, 2014, 97.0% (June 30, 2013 - 94.0%) 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,
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 3.72% as at June 30, 2014 from 3.81% as at June 30,
2013, 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 2014 of which $521.6 million
has been completed or committed up to August 8, 2014;
-- The weighted average term to maturity of the mortgage portfolio has
improved from 6.1 years to 6.7 years as at June 30, 2014;
-- As at June 30, 2014, CAPREIT has investment properties with a fair value
of $218 million that are not encumbered by mortgages and secure only the
Acquisition and Operating Facility. Unencumbered investment properties
with a fair value over $68 million are expected to be financed reducing
the total unencumbered investment properties to approximately $150
million;
Property Capital Investment Plan
During the six months ended June 30, 2014, CAPREIT made property capital investments (excluding disposed properties, head office assets, tenant improvements and signage) of $56.9 million as compared to $52.9 million the same period 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 July 4, 2014, CAPREIT announced that the Toronto Stock Exchange approved its notice of intention to make a normal course issuer bid for its Units as appropriate opportunities arise from time to time. CAPREIT's normal course issuer bid will be made in accordance with the policies of the TSX. CAPREIT may purchase its Units during the period from July 8, 2014 to July 7, 2015. Pursuant to the notice and subject to the market price of its Units and other considerations, CAPREIT may acquire over the next 12 months up to 10,659,524 Units, representing 10% of the public float. The average daily trading volume ("ADTV") for the six calendar months prior to the date hereof was 258,670 Units and CAPREIT will be permitted to re-purchase up to 25% of the ADTV on any trading day (25% being 64,668 Units).
On July 31, 2014, CAPREIT completed the acquisition of a 213-suite apartment portfolio in Charlottetown, Prince Edward Island. The purchase price for the portfolio was approximately $19.6 million, satisfied by the assumption of existing mortgages totaling approximately $14.8 million bearing an effective weighted average stated interest rate at 3.79% and weighted average term to maturity of 3.0 years, with the remaining funded from CAPREIT's Acquisition and Operating credit facility.
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 six months ended June 30, 2014, 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, August 11, 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 5855136#. The Instant Replay will be available until midnight, August 18, 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. As at June 30, 2014, CAPREIT had owning interests in 41,216 residential units, comprised of 35,034 residential suites and 29 manufactured home communities ("MHC") comprising 6,182 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 August 8, 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 August 8, 2014. The information in this press release is based on information available to Management as of August 8, 2014. Subject to applicable law, CAPREIT does not undertake any obligation to publicly update or revise any forward-looking information.
SELECTED FINANCIAL INFORMATION
Condensed Balance Sheets
June 30, December 31,
As at 2014 2013
($ Thousands)
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Investment Properties $ 5,497,243 $ 5,459,218
Total Assets 5,673,542 5,558,934
Mortgages Payable 2,576,142 2,457,182
Bank Indebtedness 117,828 187,030
Total Liabilities 2,842,542 2,801,465
Unitholders' Equity 2,831,000 2,757,469
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Condensed Income
Statements
Three Months Ended Six Months Ended
June 30, June 30,
($ Thousands) 2014 2013 2014 2013
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Net Operating Income 78,089 71,475 149,464 134,966
Trust Expenses (6,640) (5,306) (11,369) (9,681)
Unrealized Gain on
Remeasurement of
Investment Properties 32,935 10,784 37,137 44,439
Remeasurement of
Exchangeable Units (249) 415 (260) 311
Unit-based Compensation
Expenses (6,225) 5,385 (7,295) 3,675
Interest on Mortgages
Payable and Other
Financing Costs (24,926) (23,125) (48,845) (47,143)
Interest on Bank
Indebtedness (1,486) (1,490) (3,378) (2,984)
Interest on
Exchangeable Units (47) (46) (93) (105)
Other Income 1,355 780 3,414 3,265
Amortization (596) (522) (1,190) (1,039)
Unrealized and Realized
Loss on Derivative
Financial Instruments (2,574) (170) (2,650) (78)
Gain (Loss) on Foreign
Currency Translation 2,646 (6) 2,680 (6)
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Net Income 72,282 58,174 117,615 125,620
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Other Comprehensive
Income (Loss) $ 2,323 $ 1,593 $ (190) $ 8
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Comprehensive Income $ 74,605 $ 59,767 $ 117,425 $ 125,628
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Condensed Statements of Cash Flows
Three Months Ended Six Months Ended
June 30, June 30,
2014 2013 2014 2013
($ Thousands)
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Cash Provided By
Operating Activities:
Net Income $ 72,282 $ 58,174 $ 117,615 $ 125,620
Items in Net Income Not
Affecting Cash:
Changes in Non-cash
Operating Assets and
Liabilities (8,991) (13,032) (8,492) (14,390)
Realized and Unrealized
Gain on
Remeasurements (30,112) (11,029) (34,227) (44,672)
Gain on Sale of
Investments (717) - (717) (1,737)
Unit-based Compensation
Expenses 6,225 (5,385) 7,295 (3,675)
Items Related to
Financing and
Investing
Activities 23,897 23,187 47,666 46,125
Other 1,902 2,707 3,790 2,347
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Cash Provided By
Operating Activities 64,486 54,622 132,930 109,618
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Cash Used In Investing
Activities
Acquisitions (141) (72,423) (11,497) (113,145)
Capital Investments (32,476) (28,689) (76,009) (61,871)
Disposition of
Investments 7,599 - 7,599 7,815
Other (50) (291) 348 (92)
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Cash Used In Investing
Activities (25,068) (101,403) (79,559) (167,293)
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Cash Provided By
Financing Activities
Mortgages, Net of
Financing Costs 91,548 19,311 110,722 106,773
Bank Indebtedness (85,348) 74,492 (72,051) 44,405
Interest Paid (24,122) (23,504) (48,638) (46,787)
Hedge Settlement - (2,171) - (3,492)
Proceeds on Issuance of
Units 235 682 384 785
Distributions, Net of
DRIP and Other (21,731) (22,029) (43,788) (44,009)
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Cash Provided By
Financing Activities (39,418) 46,781 (53,371) 57,675
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Changes in Cash and Cash
Equivalents During the
Period - - - -
Cash and Cash
Equivalents, Beginning
of Period - - - -
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Cash and Cash
Equivalents, End of
Period $ - $ - $ - $ -
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SELECTED NON-IFRS FINANCIAL MEASURES
Reconciliation of Net Income to FFO and to NFFO
Three Months Ended Six Months Ended
June 30, June 30,
2014 2013 2014 2013
($ Thousands, except per
Unit amounts)
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Net Income $ 72,282 $ 58,174 $ 117,615 $ 125,620
Adjustments:
Unrealized Gain on
Remeasurement of
Investment Properties (32,935) (10,784) (37,137) (44,439)
Remeasurement of
Exchangeable Units 249 (415) 260 (311)
Remeasurement of Unit-
based Compensation
Liabilities 4,681 (6,076) 4,935 (4,831)
Interest on
Exchangeable Units 47 46 93 105
Corporate taxes
expense 1,405 - 1,405 -
Amortization of
Property, Plant and
Equipment 596 522 1,190 1,039
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FFO $ 46,325 $ 41,467 $ 88,361 $ 77,183
Adjustments:
Unrealized and
Realized Loss on
Derivative Financial
Instruments 2,574 170 2,650 78
Amortization of Loss
from AOCL to Interest
and Other Financing
Costs 828 845 1,649 1,597
Net Mortgage
Prepayment Cost 749 94 763 1,641
Realized Gain on Sale
of Investments (717) - (717) (1,737)
(Gain) Expense on
Foreign Currency
Translation (2,646) 6 (2,680) 6
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NFFO $ 47,113 $ 42,582 $ 90,026 $ 78,768
NFFO per Unit - Basic $ 0.431 $ 0.425 $ 0.826 $ 0.787
NFFO per Unit -
Diluted $ 0.425 $ 0.419 $ 0.815 $ 0.775
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Total Distributions
Declared (1) $ 32,484 28,976 $ 64,522 $ 57,678
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NFFO Payout Ratio (2) 68.9% 68.0% 71.7% 73.2%
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Net Distributions Paid
(1) $ 22,306 $ 22,310 $ 43,999 $ 44,224
Excess NFFO Over Net
Distributions Paid $ 24,807 $ 20,272 $ 46,027 $ 34,544
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Effective NFFO Payout
Ratio (3) 47.3% 52.4% 48.9% 56.1%
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(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 six months ended June 30, 2014.
(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 Six Months Ended
June 30 June 30
2014 2013 2014 2013
($ Thousands, except per
Unit amounts)
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NFFO $ 47,113 $ 42,582 $ 90,026 $ 78,768
Adjustments:
Provision for
Maintenance Property
Capital Investments
(1) (3,849) (3,727) (7,699) (7,455)
Amortization of Fair
Value on Grant Date
of Unit-based
Compensation 1,544 691 2,360 1,156
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AFFO $ 44,808 $ 39,546 $ 84,687 $ 72,469
AFFO per Unit - Basic $ 0.410 $ 0.395 $ 0.777 $ 0.724
AFFO per Unit -
Diluted $ 0.405 $ 0.389 $ 0.767 $ 0.713
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Distributions Declared
(2) $ 32,484 $ 28,976 $ 64,522 $ 57,678
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AFFO Payout Ratio (3) 72.5% 73.3% 76.2% 79.6%
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Net Distributions Paid
(2) $ 22,306 $ 22,310 $ 43,999 $ 44,224
Excess AFFO over Net
Distributions Paid $ 22,502 $ 17,236 $ 40,688 $ 28,245
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Effective AFFO Payout
Ratio (4) 49.8% 56.4% 52.0% 61.0%
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(1) An industry based estimate (see the Non-IFRS Measures section in the
MD&A for the three and six months ended June 30, 2014).
(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 six months ended June 30, 2014.
(3) The payout ratio compares distributions declared to AFFO.
(4) The effective payout ratio compares net distributions paid to AFFO.
Contacts:
CAPREIT
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
