TORONTO, ONTARIO--(Marketwired - Nov. 5, 2013) - 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, 2013.
| Three Months Ended | Nine Months Ended | ||||||||||||
| September 30 | September 30 | ||||||||||||
| 2013 | 2012 | 2013 | 2012 | ||||||||||
| Operating Revenues (000s) | $ | 119,995 | $ | 109,118 | $ | 353,005 | $ | 300,312 | |||||
| Net Operating Income ("NOI") (000s)(1) | $ | 72,855 | $ | 65,813 | $ | 207,821 | $ | 175,265 | |||||
| NOI Margin(1) | 60.7 | % | 60.3 | % | 58.9 | % | 58.4 | % | |||||
| Normalized Funds From Operations ("NFFO") (000s)(1) | $ | 44,263 | $ | 39,866 | $ | 123,031 | $ | 98,997 | |||||
| NFFO Per Unit - Basic(1) | $ | 0.440 | $ | 0.435 | $ | 1.227 | $ | 1.131 | |||||
| Weighted Average Number of Units - Basic (000s) | 100,576 | 91,667 | 100,251 | 87,538 | |||||||||
| NFFO Payout Ratio(1) | 67.1 | % | 65.3 | % | 71.0 | % | 74.7 | % | |||||
| (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 10.0% and 17.5% increase in revenues in third quarter and first nine months of 2013, respectively
- Acquired 2,621 apartment suites and MHC sites year-to-date, strengthening and further diversifying property portfolio
- Average monthly rents for residential properties up 3.1% compared to last year
- Portfolio occupancy remains strong at 98.5%
- NFFO up 11.0% in third quarter and 24.3% in first nine months of 2013
- Strong accretive growth as NFFO per Unit up 1.1% in third quarter and 8.5% in first nine months of 2013 despite the 10% and 15% increase in the weighted average number of Units outstanding.
- Same property NOI up 3.7% in third quarter and 4.8% through first nine months of 2013
- Closed and committed mortgage refinancings (excluding acquisitions) for $487.8 million, including $282.6 million for renewals of existing mortgages and $205.2 million for additional top up financing with a weighted average term to maturity of 9.8 years, and at a weighted average rate of 3.15%.
"We continue to increase the size and scale of our property portfolio, having already exceeded our annual target of acquiring between 1,500 and 2,000 suites and sites this year. More importantly, with recent purchases in Dublin, Ireland and Prince Edward Island, we have entered new geographic markets, further diversifying our portfolio and enhancing our risk profile. And, with the very strong capitalization rates generated by these new acquisitions, they will be immediately and significantly accretive to our NFFO," commented Thomas Schwartz, President and CEO.
"Looking ahead, we are confident 2013 will be another record year for CAPREIT, and with further growth in our property portfolio, our solid presence in key targeted geographic regions, our ongoing industry-leading operating performance and continuing strong rental markets, we expect this progress to continue for years to come," Mr. Schwartz continued.
| PORTFOLIO OPERATING RESULTS |
| Three Months Ended | Nine Months Ended | |||||||||||
| September 30 | September 30 | |||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||
| Overall Portfolio Occupancy (1) | 98.5 | % | 98.2 | % | ||||||||
| Overall Portfolio Average Monthly Rents (1),(2) | $ | 1,003 | $ | 972 | ||||||||
| Operating Revenues (000s) | $ | 119,995 | $ | 109,118 | $ | 353,005 | $ | 300,312 | ||||
| Net Rental Revenue Run-Rate (000s) (1),(3),(4) | $ | 462,958 | $ | 421,539 | ||||||||
| Operating Expenses (000s) | $ | 47,140 | $ | 43,305 | $ | 145,184 | $ | 125,047 | ||||
| NOI (000s) (4) | $ | 72,855 | $ | 65,813 | $ | 207,821 | $ | 175,265 | ||||
| NOI Margin (4) | 60.7 | % | 60.3 | % | 58.9 | % | 58.4 | % | ||||
| Number of Suites and Sites Acquired | 1,108 | 410 | 1,881 | 6,004 | ||||||||
| Number of Suites Disposed | 604 | - | 604 | 335 | ||||||||
| (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, 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 three and nine months ended September 30, 2013, total operating revenues increased by 10.0% and 17.5%, 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 nine months ended September 30, 2013, ancillary revenues, including parking, laundry and antenna income, rose by 15.2% and 22%, 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 September 30, 2013 increased to $463.0 million, up 9.8% from $421.5 million as at September 30, 2012 primarily due to acquisitions completed within the past twelve months and strong rental growth. Net rental revenue for the twelve months ended September 30, 2013 was $434.2 million (2012 - $372.7 million).
| Portfolio Average Monthly Rents ("AMR") | |||||||||||||||||||
| Total Portfolio | Properties Owned Prior to September 30, 2012 |
||||||||||||||||||
| As at September 30, | 2013 | 2012 | 2013 | 2012 (1) | |||||||||||||||
| AMR | Occ. % | AMR | Occ. % | AMR | Occ. % | AMR | Occ. % | ||||||||||||
| Average Residential Suites | $ | 1,058 | 98.4 | $ | 1,026 | 98.2 | $ | 1,057 | 98.5 | $ | 1,026 | 98.1 | |||||||
| Average MHC Land Lease Sites | $ | 451 | 99.3 | $ | 435 | 98.8 | $ | 451 | 99.3 | $ | 435 | 98.8 | |||||||
| Overall Portfolio Average | $ | 1,003 | 98.5 | $ | 972 | 98.2 | $ | 998 | 98.6 | $ | 970 | 98.2 | |||||||
| (1) | Prior period's comparable AMR and occupancy have been restated for properties disposed of between October 1, 2012 and September 30, 2013. |
Average monthly rents for residential suites increased by 3.1% to $1,058 as at September 30, 2013 compared to the same period last year while occupancy remained strong at 98.4% 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 September 30, 2012 increased as at September 30, 2013 to $1,057 from $1,026 as at September 30, 2012, an increase of 3.0% from the same period last year with occupancies rising to 98.5% from 98.1%. For the MHC land lease portfolio, average monthly rents increased to $451 as at September 30, 2013, compared to $435 as at September 30, 2012, with nearly full occupancy at 99.3%, up from 98.8% last year.
| Suite Turnovers and Lease Renewals | ||||||||||||
| For the Three Months Ended September 30, | 2013 | 2012 | ||||||||||
| Change in AMR | % Turnovers | Change in AMR | % Turnovers | |||||||||
| $ | % | & Renewals (1 | ) | $ | % | & Renewals (1 | ) | |||||
| Suite Turnovers | 27.1 | 2.6 | 9.9 | 21.7 | 2.1 | 9.5 | ||||||
| Lease Renewals | 28.0 | 2.7 | 27.4 | 32.8 | 3.2 | 25.4 | ||||||
| Weighted Average of Turnovers and Renewals | 27.7 | 2.7 | 29.8 | 2.9 | ||||||||
| For the Nine Months Ended September 30, | 2013 | 2012 | ||||||||||
| Change in AMR | % Turnovers | Change in AMR | % Turnovers | |||||||||
| $ | % | & Renewals (1 | ) | $ | % | & Renewals (1 | ) | |||||
| Suite Turnovers | 22.7 | 2.2 | 22.6 | 21.7 | 2.1 | 20.9 | ||||||
| Lease Renewals | 28.7 | 2.7 | 61.9 | 34.3 | 3.3 | 55.7 | ||||||
| Weighted Average of Turnovers and Renewals | 27.1 | 2.6 | 30.8 | 3.0 | ||||||||
| (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 guideline increases for 2013 (Ontario - 2.5%, British Columbia - 3.8%), compared to the higher permitted 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 increases 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 decreased in the three and nine months ended September 30, 2013, compared to the same period last year as a result of lower realty taxes, utilities, and wage costs as a percentage of operating revenues.
Net Operating Income
In the three months ended September 30, 2013, NOI improved by $7.0 million or 10.7%, and the NOI margin increased to 60.7% from 60.3% for the same period last year. For the nine months ended September 30, 2013, NOI increased by $32.6 million or 18.6%, and the NOI margin improved to 58.9% from 58.4% for the same period last year. The significant improvements in NOI were primarily the result of acquisitions completed in the last 12 month period, combined with the higher operating revenues.
For the three and nine months ended September 30, 2013, operating revenues for stabilized suites and sites increased 3.2% and 3.0% while, operating expenses decreased 2.4% and 0.5%, respectively, compared to the same periods last year. As a result, for the three and nine months ended September 30, 2013, stabilized NOI increased by 3.7% and 4.8%, respectively, compared to the same periods last year.
| NON-IFRS FINANCIAL MEASURES |
| Three Months Ended | Nine Months Ended | |||||||||||
| September 30, | September 30, | |||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||
| NFFO (000s) | $ | 44,263 | $ | 39,866 | $ | 123,031 | $ | 98,997 | ||||
| NFFO Per Unit - Basic | $ | 0.440 | $ | 0.435 | $ | 1.227 | $ | 1.131 | ||||
| Cash Distributions Per Unit | $ | 0.288 | $ | 0.277 | $ | 0.850 | $ | 0.817 | ||||
| NFFO Payout Ratio | 67.1 | % | 65.3 | % | 71.0 | % | 74.7 | % | ||||
| NFFO Effective Payout Ratio | 48.1 | % | 50.9 | % | 53.3 | % | 57.3 | % | ||||
| LIQUIDITY AND LEVERAGE |
| As at September 30, | 2013 | 2012 | ||
| Total Debt to Gross Book Value | 49.42 | % | 50.97 | % |
| Total Debt to Gross Historical Cost (1) | 58.99 | % | 59.94 | % |
| Total Debt to Total Capitalization | 55.64 | % | 50.24 | % |
| Debt Service Coverage Ratio (times) (2) | 1.55 | 1.49 | ||
| Interest Coverage Ratio (times) (2) | 2.61 | 2.46 | ||
| Weighted Average Mortgage Interest Rate (3) | 3.79 | % | 4.03 | % |
| Weighted Average Mortgage Term to Maturity (years) | 5.8 | 5.3 |
| (1) | Based on historical cost of investment properties. |
| (2) | Based on the trailing four quarters ended September 30, 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 September 30, 2013 would be 3.98% (September 30, 2012 - 4.19%). |
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, 2013 improved to 49.42% compared to 50.97% for the same period last year;
- Debt service and interest coverage ratios for the four quarters ended September 30, 2013 improved to 1.55 times and 2.61 times compared to 1.49 times and 2.46 times, respectively, for the same period last year;
- As at September 30, 2013, 92.0% (September 30, 2012 - 93.1%) 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 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 from 4.03% as at September 30, 2012, to 3.79% as at September 30, 2013, resulting in significant interest rate savings in future years;
- Management expects to raise between $575 million and $625 million in total mortgage renewals and refinancings in 2013;
- The weighted average term to maturity of the mortgage portfolio has improved from 5.3 year to 5.8 years as at September 30, 2013;
- As at September 30, 2013, CAPREIT has investment properties with a fair value of $140.5 million that are not encumbered by mortgages and secure only the Acquisition and Operating Facility;
Property Capital Investment Plan
During the nine months ended September 30, 2013, CAPREIT made property capital investments (excluding disposed properties, head office assets, tenant improvements and signage) of $101.5 million as compared to $80.8 million for the same period last year. For the full 2013 year, CAPREIT expects to complete property capital investments of approximately $160 million to $170 million, including approximately $69 million targeted at acquisitions completed since January 1, 2011 and approximately $13 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 September 18, 2013, CAPREIT announced it had agreed to sell, subject to regulatory approval, 6,327,000 Units for $20.55 per Unit for aggregate gross proceeds of $130.0 million on a bought-deal basis with an over-allotment option. The transaction closed on October 10, 2013, and under the over-allotment option, 949,050 additional Units were also issued on October 22, 2013 for aggregate gross proceeds of $19.5 million. CAPREIT used the net proceeds of the offering to repay a part of its borrowings under its Acquisition and Operating Facility.
On October 22, 2013, CAPREIT announced the acquisition of a portfolio of 240 residential suites and 500 land lease sites in four communities located in Charlottetown and Cornwall, Prince Edward Island. CAPREIT paid approximately $34.9 million for the portfolio, satisfied by the assumption of mortgage debt of approximately $10.3 million bearing a weighted average interest rate of 4.5%, with the balance in cash from CAPREIT's Acquisition and Operating credit facility.
As at November 5, 2013, CAPREIT is committed under a purchase agreement to acquire a portfolio of manufactured home communities in New Brunswick for approximately $69.3 million expected to be satisfied initially through CAPREIT's Acquisition and Operating credit facility and finally through new CMHC-insured financings on properties which are currently unencumbered.
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, 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 Scott Cryer, Chief Financial Officer, will be held Wednesday, November 6, 2013 at 10.00 am EST. The telephone numbers for the conference call are: Local/International: (416) 340-2219, 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 2320975#. The Instant Replay will be available until midnight, November 13, 2013. 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 September 30, 2013, CAPREIT had owning interests in 38,502 residential units, comprised of 35,132 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 5, 2013, 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 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; that the Euro will not experience significant fluctuations against the Canadian dollar; 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 5, 2013. The information in this press release is based on information available to Management as of November 5, 2013. 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, 2013 | December 31, 2012 | |||
| ($ Thousands) | |||||
| Investment Properties | $ | 5,234,638 | $ | 4,826,355 | |
| Total Assets | 5,344,386 | 4,921,546 | |||
| Mortgages Payable | 2,425,815 | 2,189,556 | |||
| Bank Indebtedness | 228,956 | 147,316 | |||
| Total Liabilities | 2,794,651 | 2,492,332 | |||
| Unitholders' Equity | 2,549,735 | 2,429,214 | |||
| Condensed Income Statements | |||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||
| September 30, | September 30, | ||||||||||||
| ($ Thousands) | 2013 | 2012 | 2013 | 2012 | |||||||||
| Net Operating Income | 72,855 | 65,813 | 207,821 | 175,265 | |||||||||
| Trust Expenses | (4,193 | ) | (2,699 | ) | (13,874 | ) | (9,505 | ) | |||||
| Unrealized Gain on Remeasurement of Investment Properties | 5,597 | 61,458 | 50,036 | 165,090 | |||||||||
| Realized Loss on Disposition of Investment Properties | (883 | ) | - | (883 | ) | (528 | ) | ||||||
| Remeasurement of Exchangeable Units | 352 | (264 | ) | 663 | (896 | ) | |||||||
| Unit-based Compensation Expenses | 5,683 | (4,139 | ) | 9,358 | (11,493 | ) | |||||||
| Interest on Mortgages Payable and Other Financing Costs | (23,717 | ) | (21,486 | ) | (70,860 | ) | (63,157 | ) | |||||
| Interest on Bank Indebtedness | (1,741 | ) | (2,219 | ) | (4,725 | ) | (4,212 | ) | |||||
| Interest on Exchangeable Units | (46 | ) | (77 | ) | (151 | ) | (281 | ) | |||||
| Other Income | 796 | 1,416 | 4,061 | 2,631 | |||||||||
| Amortization | (561 | ) | (565 | ) | (1,600 | ) | (1,631 | ) | |||||
| Unrealized and Realized Loss on Derivative Financial Instruments | (449 | ) | (535 | ) | (527 | ) | (2,002 | ) | |||||
| Loss on Foreign Currency Translation | (24 | ) | - | (30 | ) | - | |||||||
| Net Income | 53,669 | 96,703 | 179,289 | 249,281 | |||||||||
| Other Comprehensive Income (Loss) | $ | 1,798 | $ | (705 | ) | $ | 1,806 | $ | 1,536 | ||||
| Comprehensive Income | $ | 55,467 | $ | 95,998 | $ | 181,095 | $ | 250,817 | |||||
| Condensed Statements of Cash Flows | ||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||
| September 30, | September 30, | |||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||
| ($ Thousands) | ||||||||||||||
| Cash Provided By Operating Activities: | ||||||||||||||
| Net Income | $ | 53,669 | $ | 96,703 | $ | 179,289 | $ | 249,281 | ||||||
| Items in Net Income Not Affecting Cash: | ||||||||||||||
| Changes in Non-cash Operating Assets and Liabilities | (3,043 | ) | 7,919 | (17,433 | ) | (1,250 | ) | |||||||
| Realized and Unrealized Gain on Remeasurements | (4,617 | ) | (60,659 | ) | (49,289 | ) | (161,664 | ) | ||||||
| Gain on Sale of Investments | - | (975 | ) | (1,737 | ) | (1,165 | ) | |||||||
| Unit-based Compensation Expenses | (5,683 | ) | 4,139 | (9,358 | ) | 11,493 | ||||||||
| Items Related to Financing and Investing Activities | 23,562 | 22,420 | 69,687 | 62,199 | ||||||||||
| Other | 2,644 | 949 | 4,991 | 4,344 | ||||||||||
| Cash Provided By Operating Activities | 66,532 | 70,496 | 176,150 | 163,238 | ||||||||||
| Cash Used In Investing Activities | ||||||||||||||
| Acquisitions | (205,734 | ) | (38,020 | ) | (318,879 | ) | (345,906 | ) | ||||||
| Capital Investments | (40,562 | ) | (51,018 | ) | (102,433 | ) | (97,025 | ) | ||||||
| Disposition of Investments | - | 4,428 | 7,815 | 5,531 | ||||||||||
| Dispositions | 57,599 | - | 57,599 | 25,700 | ||||||||||
| Other | (54 | ) | 1,185 | (146 | ) | 2,226 | ||||||||
| Cash Used In Investing Activities | (188,751 | ) | (83,425 | ) | (356,044 | ) | (409,474 | ) | ||||||
| Cash Provided By Financing Activities | ||||||||||||||
| Mortgages, Net of Financing Costs | 130,010 | 32,308 | 236,783 | 17,182 | ||||||||||
| Bank Indebtedness | 37,235 | 32,257 | 81,640 | 191,273 | ||||||||||
| Interest Paid | (23,882 | ) | (23,836 | ) | (70,669 | ) | (64,830 | ) | ||||||
| Hedge Settlement | - | (8,595 | ) | (3,492 | ) | (11,867 | ) | |||||||
| Proceeds on Issuance of Units | 511 | 683 | 1,296 | 170,032 | ||||||||||
| Distributions, Net of DRIP and Other | (21,655 | ) | (19,888 | ) | (65,664 | ) | (55,554 | ) | ||||||
| Cash Provided By Financing Activities | 122,219 | 12,929 | 179,894 | 246,236 | ||||||||||
| 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 | Nine Months Ended | ||||||||||||
| September 30, | September 30, | ||||||||||||
| 2013 | 2012 | 2013 | 2012 | ||||||||||
| ($ Thousands, except per Unit amounts) | |||||||||||||
| Net Income | $ | 53,669 | $ | 96,703 | $ | 179,289 | $ | 249,281 | |||||
| Adjustments: | |||||||||||||
| Unrealized Gain on Remeasurement of Investment Properties | (5,597 | ) | (61,458 | ) | (50,036 | ) | (165,090 | ) | |||||
| Realized Loss on Disposition of Investment Properties | 883 | - | 883 | 528 | |||||||||
| Remeasurement of Exchangeable Units | (352 | ) | 264 | (663 | ) | 896 | |||||||
| Remeasurement of Unit-based Compensation Liabilities | (6,358 | ) | 3,591 | (11,189 | ) | 9,384 | |||||||
| Interest on Exchangeable Units | 46 | 77 | 151 | 281 | |||||||||
| Amortization of Property, Plant and Equipment | 561 | 565 | 1,600 | 1,631 | |||||||||
| FFO | $ | 42,852 | $ | 39,742 | $ | 120,035 | $ | 96,911 | |||||
| Adjustments: | |||||||||||||
| Unrealized and Realized Loss on Derivative Financial Instruments | 449 | 535 | 527 | 2,002 | |||||||||
| Amortization of Loss from AOCL to Interest and Other Financing Costs | 840 | 574 | 2,437 | 1,246 | |||||||||
| Net Mortgage Prepayment Cost | 98 | - | 1,739 | - | |||||||||
| Realized Gain on Sale of Investments | - | (985 | ) | (1,737 | ) | (1,162 | ) | ||||||
| Loss on Foreign Currency Translation | 24 | - | 30 | - | |||||||||
| NFFO | $ | 44,263 | $ | 39,866 | $ | 123,031 | $ | 98,997 | |||||
| NFFO per Unit - Basic | $ | 0.440 | $ | 0.435 | $ | 1.227 | $ | 1.131 | |||||
| NFFO per Unit - Diluted | $ | 0.435 | $ | 0.428 | $ | 1.210 | $ | 1.114 | |||||
| Total Distributions Declared (1) | $ | 29,682 | 26,029 | $ | 87,361 | $ | 73,937 | ||||||
| NFFO Payout Ratio (2) | 67.1 | % | 65.3 | % | 71.0 | % | 74.7 | % | |||||
| Net Distributions Paid (1) | $ | 21,304 | $ | 20,281 | $ | 65,528 | $ | 56,768 | |||||
| Excess NFFO Over Net Distributions Paid | $ | 22,959 | $ | 19,585 | $ | 57,503 | $ | 42,229 | |||||
| Effective NFFO Payout Ratio (3) | 48.1 | % | 50.9 | % | 53.3 | % | 57.3 | % | |||||
| (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, 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 | Nine Months Ended | ||||||||||||
| September 30 | September 30 | ||||||||||||
| 2013 | 2012 | 2013 | 2012 | ||||||||||
| ($ Thousands, except per Unit amounts) | |||||||||||||
| NFFO | $ | 44,263 | $ | 39,866 | $ | 123,031 | $ | 98,997 | |||||
| Adjustments: | |||||||||||||
| Provision for Maintenance Property Capital Investments (1) | (3,749 | ) | (3,372 | ) | (11,247 | ) | (10,115 | ) | |||||
| Amortization of Fair Value on Grant Date of Unit-based Compensation | 675 | 548 | 1,831 | 2,109 | |||||||||
| AFFO | $ | 41,189 | $ | 37,042 | $ | 113,615 | $ | 90,991 | |||||
| AFFO per Unit - Basic | $ | 0.410 | $ | 0.404 | $ | 1.133 | $ | 1.039 | |||||
| AFFO per Unit - Diluted | $ | 0.404 | $ | 0.398 | $ | 1.117 | $ | 1.024 | |||||
| Distributions Declared (2) | $ | 29,682 | $ | 26,029 | $ | 87,361 | $ | 73,937 | |||||
| AFFO Payout Ratio (3) | 72.1 | % | 70.3 | % | 76.9 | % | 81.3 | % | |||||
| Net Distributions Paid (2) | $ | 21,304 | $ | 20,281 | $ | 65,528 | $ | 56,768 | |||||
| Excess AFFO over Net Distributions Paid | $ | 19,885 | $ | 16,761 | $ | 48,087 | $ | 34,223 | |||||
| Effective AFFO Payout Ratio (4) | 51.7 | % | 54.8 | % | 57.7 | % | 62.4 | % | |||||
| (1) | An industry based estimate (see the Non-IFRS Measures section in the MD&A for the three and nine months ended September 30, 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 three and nine months ended September 30, 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