Canada NewsWire
TORONTO, Feb. 15, 2017
TORONTO, Feb. 15, 2017 /CNW/ - Choice Properties Real Estate Investment Trust ("Choice Properties" or the "Trust") (TSX: CHP.UN) today announced its consolidated financial results for the fourth quarter ended December 31, 2016. The Trust's Annual Report to Unitholders will be available in the Investor Relations section of the Trust's website at www.choicereit.ca, filed with SEDAR and available at www.sedar.com.
Quarter Highlights:
Annual Highlights:
"2016 was another successful year for Choice Properties. With the team's focused execution, our strategy contributed to our progress, to our development and delivered improved financial and operational performance," said John Morrison, President and Chief Executive Officer. "We continued to acquire quality assets and actively manage our portfolio, and the momentum in our development program resulted in significant value creation, with new GLA completed and a strong foundation for future development. I am pleased with the progress the team delivered and the value that we created for our stakeholders."
(1) See "Non-GAAP Financial Measures" beginning on page 5.
Financial and Operational Summary
As at or for the three months ended December 31 ($ thousands except where otherwise indicated) | | | | | |
| | | | | |
| | 2016 | | 2015 | |
Number of properties | | | 535 | | 519 |
Gross Leasable Area ("GLA") (in millions of square feet) | | | 43.6 | | 41.6 |
Occupancy | | | 98.9% | | 98.6% |
Rental revenue | | $ | 197,713 | $ | 191,057 |
Net Operating Income ("NOI")(1) | | $ | 139,745 | $ | 132,133 |
Net Income(i) | | $ | 255,574 | $ | 40,401 |
Net Income(i) per unit diluted | | $ | 0.621 | $ | 0.099 |
Funds from Operations ("FFO")(1) per unit diluted | | $ | 0.251 | $ | 0.247 |
Adjusted Funds from Operations ("AFFO")(1) per unit diluted | | $ | 0.199 | $ | 0.201 |
Adjusted Funds from Operations(1) payout ratio - diluted | | | 89.2% | | 80.8% |
Distribution declared per unit | | $ | 0.1775 | $ | 0.1625 |
Total assets (in millions) | | $ | 9,435 | $ | 8,906 |
Debt to total assets(ii) | | | 44.5% | | 44.5% |
Debt service coverage(ii) | | | 3.5x | | 3.6x |
(i) | Net income included a positive adjustment of $107,800 and a negative adjustment of $95,418 for the fair value of Exchangeable Units, and positive adjustments of $101,661 and $87,902 for the fair value of investment properties, for the three months ended December 31, 2016 and December 31, 2015, respectively. Net income before adjustments to fair value(1) was $46,113 and $47,917 for the three months ended December 31, 2016 and December 31, 2015, respectively. |
(ii) | Debt ratios include Class C LP Units but exclude Exchangeable Units. The ratios are non-GAAP financial measures calculated based on the trust indentures, as supplemented. |
Financial Results for the Quarter:
See "Non-GAAP Financial Measures" beginning on page 5.
Operational Results for the Quarter:
Capital Structure:
Outlook
Choice Properties continues to drive value creation through accretive acquisitions, strategic development and active management of its portfolio of properties. This strategy supports the Trust's goal to expand its asset base and increase monthly distributions to unitholders.
Choice Properties is well positioned to meet its current obligations and to invest for future growth. The Trust's competitive advantages include: a sizable asset base that is geographically diverse across Canada; long-term leases and a strategic alliance with Loblaw; and an existing development pipeline, supported by sound financial management focused on maintaining a solid balance sheet and its investment grade credit ratings.
In 2017, Choice Properties expects to:
(1) | See "Non-GAAP Financial Measures" beginning on page 5. |
(2) | Debt ratios include Class C LP Units but exclude Exchangeable Units. The ratios are non-GAAP financial measures calculated based on the trust indentures, as supplemented. |
Forward-Looking Statements
This press release contains forward-looking statements about Choice Properties' objectives, outlook, plans, goals, aspirations, strategies, financial condition, results of operations, cash flows, performance, prospects and opportunities. Specific statements with respect to anticipated future results can be found in various sections of this press release and in the MD&A of Choice Properties' 2016 Annual Report to Unitholders. Forward-looking statements are typically identified by words such as "expect", "anticipate", "believe", "foresee", "could", "estimate", "goal", "intend", "plan", "seek", "strive" , "will", "may", "should" and similar expressions, as they relate to Choice Properties and its management.
Forward-looking statements reflect Choice Properties' current estimates, beliefs and assumptions, which are based on management's perception of historic trends, current conditions, outlook and expected future developments, as well as other factors it believes are appropriate in the circumstances. Choice Properties' expectation of operating and financial performance is based on certain assumptions, including assumptions about future growth potential, prospects and opportunities, industry trends, future levels of indebtedness, current tax laws, current economic conditions and no new competition in the market that leads to reduced revenues and profitability. Management's estimates, beliefs and assumptions are inherently subject to significant business, economic, competitive and other uncertainties and contingencies regarding future events and as such, are subject to change. Choice Properties can give no assurance that such estimates, beliefs and assumptions will prove to be correct.
Numerous risks and uncertainties could cause Choice Properties' actual results to differ materially from those expressed, implied or projected in the forward-looking statements, including, those described in Section 12, "Enterprise Risks and Risk Management", in the MD&A of Choice Properties' 2016 Annual Report. Such risks and uncertainties include:
This is not an exhaustive list of the factors that may affect Choice Properties' forward-looking statements. Other risks and uncertainties not presently known to Choice Properties could also cause actual results or events to differ materially from those expressed in its forward-looking statements. Additional risks and uncertainties are discussed in Choice Properties' materials filed with the Canadian securities regulatory authorities from time to time, including the Trust's 2016 Annual Information Form. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect Choice Properties' expectations only as of the date of this press release. Except as required by applicable law, Choice Properties does not undertake to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Non-GAAP Financial Measures
Choice Properties reports non-GAAP financial measures, including, but not limited to, Net Operating Income ("NOI"), Net Income before Adjustments to Fair Value, Funds from Operations ("FFO"), and Adjusted Funds from Operations ("AFFO"). The Trust believes these non-GAAP financial measures provide useful information to both management and investors in measuring the financial performance and financial condition of the Trust for the reasons outlined below.
Management uses these and other non-GAAP financial measures to exclude the impact of certain expenses and income that must be recognized under IFRS when analyzing operating performance, as the excluded items are not necessarily reflective of Choice Properties' underlying operating performance or impact the comparability of financial performance between periods.
These measures do not have a standardized meaning prescribed by IFRS and therefore they may not be comparable to similarly titled measures presented by other publicly traded REITs, and should not be construed as an alternative to other financial measures determined in accordance with IFRS.
A comprehensive list of non-GAAP measures are defined and discussed in the Trust's 2016 Annual Report.
Net Operating Income NOI is defined as rental revenue, excluding straight-line rent, from investment properties less property operating costs. NOI is a key performance indicator as it evaluates the operating performance of the portfolio and represents a measure over which management has control. It is also a key input in determining the fair value of the portfolio. The Trust's method of calculating NOI may differ from other issuers' methods and, accordingly, may not be comparable to NOI reported by other issuers.
Net Income before Adjustments to Fair Value Net Income (or net loss) as calculated under IFRS excluding adjustments to fair value of Exchangeable Units, investment properties and investment property held in equity-accounted joint venture.
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