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Name | Symbol | Market | Type |
---|---|---|---|
RioCan Real Estate Investment Trust | TSX:REI.UN | Toronto | Trust |
Price Change | % Change | Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.05 | 0.28% | 17.62 | 17.60 | 17.71 | 17.72 | 17.47 | 17.55 | 900,772 | 21:12:39 |
“RioCan had a solid start to 2023 with strong first quarter results. Our occupancy, retention rates and leasing spreads remain high as demand continues to intensify for quality retail space that is short in supply. This operating strength drove same-property NOI while contributions from completed developments also added to our growth,” said Jonathan Gitlin, President and CEO of RioCan. “As always, we are prudently managing risk, and maintaining a healthy balance sheet with strong liquidity and access to various financing channels. The quality of our properties and tenants, along with our operational excellence, provides us with growing income that supports our asset values, outweighing the volatile macro-economic environment and reinforcing our confidence to reaffirm our FFO/unit growth guidance for the year."
Financial Highlights | |||||||
(in millions, except where otherwise noted, and per unit values) | |||||||
Three months ended March 31 | 2023 | 2022 | |||||
FFO 1 | $ | 131.3 | $ | 130.6 | |||
FFO per unit - diluted 1 | $ | 0.44 | $ | 0.42 | |||
Net income | $ | 118.0 | $ | 160.1 | |||
Weighted average Units outstanding - diluted (in thousands) | 300,547 | 310,114 | |||||
As at | March 31, 2023 | December 31, 2022 | |||||
Net book value per unit | $ | 25.83 | $ | 25.73 | |||
1. A non-GAAP measurement. For definitions, reconciliations and the basis of presentation of RioCan's non-GAAP measures, refer to the Basis of Presentation and Non-GAAP Measures section in this News Release.
FFO per Unit and Net Income
1. A non-GAAP measurement. For definitions, reconciliations and the basis of presentation of RioCan's non-GAAP measures, refer to the Basis of Presentation and Non-GAAP Measures section in this News Release.
Operation Highlights
Three months ended March 31 | 2023 | 2022 | |||||
Operation Highlights (i) | |||||||
Occupancy - committed (ii) | 97.4 | % | 97.0 | % | |||
Retail occupancy - committed (ii) | 98.0 | % | 97.4 | % | |||
Blended leasing spread | 12.3 | % | 8.9 | % | |||
New leasing spread | 14.8 | % | 13.5 | % | |||
Renewal leasing spread | 11.6 | % | 6.7 | % | |||
(i) Includes commercial portfolio only.(ii) Information presented as at respective periods then ended.
RioCan Living Update 1
1. Units at 100% ownership interest.
Development Highlights
(in millions except square feet) | |||||||
Three months ended March 31 | 2023 | 2022 | |||||
Development Highlights | |||||||
Development Completions - sq. ft. in thousands (i) | 66.0 | 145.0 | |||||
Development Spending | $ | 88.3 | $ | 91.9 | |||
Development Projects Under Construction - sq. ft. in thousands (ii) | 1,890.0 | 2,206.0 | |||||
(i) At RioCan's ownership. Represents net leasable area (NLA) of property under development completions. Excludes NLA of residential inventory completions.(ii) Information presented as at the respective periods then ended, includes properties under development and residential inventory, equity-accounted joint ventures and represents gross floor area of the respective projects.
Investing and Capital Recycling
1. A non-GAAP measurement. For definitions, reconciliations and the basis of presentation of RioCan's non-GAAP measures, refer to the Basis of Presentation and Non-GAAP Measures section in this News Release.2. Focus Five projects are large scale, transit-oriented, mixed-use developments in the Greater Toronto Area that the Trust is currently advancing through zoning and the site plan approval process.
Capital Management Update
Balance Sheet Strength
(in millions except percentages)As at | March 31, 2023 | December 31, 2022 | |||||||
Balance Sheet Strength Highlights | |||||||||
Liquidity (i) 1 | $ | 1,728 | $ | 1,548 | |||||
Adjusted Debt to Adjusted EBITDA (i) 1 | 9.48 | x | 9.51 | x | |||||
Total Adjusted Debt to Total Adjusted Assets (i) 1 | 45.4 | % | 45.2 | % | |||||
Unencumbered Assets (i) 1 | $ | 8,275 | $ | 8,257 | |||||
Unencumbered Assets to Unsecured Debt (i) 1 | 215 | % | 218 | % | |||||
(i) At RioCan's proportionate share.
1. A non-GAAP measurement. For definitions, reconciliations and the basis of presentation of RioCan's non-GAAP measures, refer to the Basis of Presentation and Non-GAAP Measures section in this News Release.
Conference Call and Webcast
Interested parties are invited to participate in a conference call with management on Thursday, May 11, 2023 at 10:00 a.m. (ET). Participants will be required to identify themselves and the organization on whose behalf they are participating.
To access the conference call, click on the following link to register at least 10 minutes prior to the scheduled start of the call: Pre-registration link. Participants who pre-register at any time prior to the call will receive an email with dial-in credentials including a login passcode and PIN to gain immediate access to the live call. Those that are unable to pre-register may dial-in for operator assistance by calling 1-833-950-0062 and entering the access code: 895958.
For those unable to participate in the live mode, a replay will be available at 1-866-813-9403 with access code 642360.
To access the simultaneous webcast, visit RioCan’s website at Events and Presentations and click on the link for the webcast.
About RioCan
RioCan is one of Canada’s largest real estate investment trusts. RioCan owns, manages and develops retail-focused, increasingly mixed-use properties located in prime, high-density transit-oriented areas where Canadians want to shop, live and work. As at March 31, 2023, our portfolio is comprised of 191 properties with an aggregate net leasable area of approximately 33.5 million square feet (at RioCan's interest) including office, residential rental and 11 development properties. To learn more about us, please visit www.riocan.com.
Basis of Presentation and Non-GAAP Measures
All figures included in this News Release are expressed in Canadian dollars unless otherwise noted. RioCan’s unaudited interim condensed consolidated financial statements ("Condensed Consolidated Financial Statements") are prepared in accordance with International Financial Reporting Standards (IFRS). Financial information included within this News Release does not contain all disclosures required by IFRS, and accordingly should be read in conjunction with the Trust's Condensed Consolidated Financial Statements and MD&A for the three months ended March 31, 2023, which are available on RioCan's website at www.riocan.com and on SEDAR at www.sedar.com.
Consistent with RioCan’s management framework, management uses certain financial measures to assess RioCan’s financial performance, which are not in accordance with generally accepted accounting principles (GAAP) under IFRS. Funds From Operations (“FFO”), FFO per unit, Net Operating Income ("NOI"), Same Property NOI, Development Spending, Total Acquisitions, Liquidity, Adjusted Debt to Adjusted EBITDA, Total Adjusted Debt to Total Adjusted Assets, RioCan's Proportionate Share, Unencumbered Assets to Unsecured Debt and Percentage of Normalized NOI Generated from Unencumbered Assets, as well as other measures that may be discussed elsewhere in this News Release, do not have a standardized definition prescribed by IFRS and are, therefore, unlikely to be comparable to similar measures presented by other reporting issuers. RioCan supplements its IFRS measures with these Non-GAAP measures to aid in assessing the Trust’s underlying performance and reports these additional measures so that investors may do the same. Non-GAAP measures should not be considered as alternatives to net income or comparable metrics determined in accordance with IFRS as indicators of RioCan’s performance, liquidity, cash flow, and profitability. For full definitions of these measures, please refer to the "Non-GAAP Measures” section in RioCan’s MD&A for the three months ended March 31, 2023.
The reconciliations for non-GAAP measures included in this News Release are outlined as follows:
RioCan's Proportionate Share
The following table reconciles the consolidated balance sheets from IFRS to RioCan's proportionate share basis as at March 31, 2023 and December 31, 2022:
As at | March 31, 2023 | December 31, 2022 | |||||||||||||
(in thousands of dollars) | IFRS basis | Equity-accountedinvestments | RioCan'sproportionateshare | IFRS basis | Equity-accountedinvestments | RioCan'sproportionateshare | |||||||||
Assets | |||||||||||||||
Investment properties | $ | 13,874,919 | $ | 400,031 | $ | 14,274,950 | $ | 13,807,740 | $ | 398,701 | $ | 14,206,441 | |||
Equity-accounted investments | 373,339 | (373,339 | ) | — | 364,892 | (364,892 | ) | — | |||||||
Mortgages and loans receivable | 206,668 | — | 206,668 | 269,339 | — | 269,339 | |||||||||
Residential inventory | 289,556 | 228,416 | 517,972 | 272,005 | 214,536 | 486,541 | |||||||||
Assets held for sale | 23,500 | — | 23,500 | 42,140 | — | 42,140 | |||||||||
Receivables and other assets | 313,998 | 38,531 | 352,529 | 259,514 | 37,779 | 297,293 | |||||||||
Cash and cash equivalents | 97,133 | 11,852 | 108,985 | 86,229 | 8,001 | 94,230 | |||||||||
Total assets | $ | 15,179,113 | $ | 305,491 | $ | 15,484,604 | $ | 15,101,859 | $ | 294,125 | $ | 15,395,984 | |||
Liabilities | |||||||||||||||
Debentures payable | $ | 3,141,869 | $ | — | $ | 3,141,869 | $ | 2,942,051 | $ | — | $ | 2,942,051 | |||
Mortgages payable | 2,721,509 | 173,758 | 2,895,267 | 2,659,180 | 172,100 | 2,831,280 | |||||||||
Lines of credit and other bank loans | 952,425 | 96,331 | 1,048,756 | 1,141,112 | 89,187 | 1,230,299 | |||||||||
Accounts payable and other liabilities | 605,383 | 35,402 | 640,785 | 630,624 | 32,838 | 663,462 | |||||||||
Total liabilities | $ | 7,421,186 | $ | 305,491 | $ | 7,726,677 | $ | 7,372,967 | $ | 294,125 | $ | 7,667,092 | |||
Equity | |||||||||||||||
Unitholders’ equity | 7,757,927 | — | 7,757,927 | 7,728,892 | — | 7,728,892 | |||||||||
Total liabilities and equity | $ | 15,179,113 | $ | 305,491 | $ | 15,484,604 | $ | 15,101,859 | $ | 294,125 | $ | 15,395,984 |
The following tables reconcile the consolidated statements of income from IFRS to RioCan's proportionate share basis for the three months ended March 31, 2023 and 2022:
Three months ended March 31, 2023 | Three months ended March 31, 2022 | |||||||||||||||||
(in thousands of dollars) | IFRS basis | Equity-accountedinvestments | RioCan'sproportionateshare | IFRS basis | Equity-accountedinvestments | RioCan'sproportionateshare | ||||||||||||
Revenue | ||||||||||||||||||
Rental revenue | $ | 274,681 | $ | 7,404 | $ | 282,085 | $ | 272,131 | $ | 6,938 | $ | 279,069 | ||||||
Residential inventory sales | — | 2,363 | 2,363 | 15,969 | 936 | 16,905 | ||||||||||||
Property management and other service fees | 4,819 | — | 4,819 | 5,882 | — | 5,882 | ||||||||||||
279,500 | 9,767 | 289,267 | 293,982 | 7,874 | 301,856 | |||||||||||||
Operating costs | ||||||||||||||||||
Rental operating costs | ||||||||||||||||||
Recoverable under tenant leases | 98,808 | 880 | 99,688 | 100,122 | 622 | 100,744 | ||||||||||||
Non-recoverable costs | 7,449 | 647 | 8,096 | 6,056 | 588 | 6,644 | ||||||||||||
Residential inventory cost of sales | — | 1,126 | 1,126 | 13,936 | 422 | 14,358 | ||||||||||||
106,257 | 2,653 | 108,910 | 120,114 | 1,632 | 121,746 | |||||||||||||
Operating income | 173,243 | 7,114 | 180,357 | 173,868 | 6,242 | 180,110 | ||||||||||||
Other income (loss) | ||||||||||||||||||
Interest income | 7,041 | 601 | 7,642 | 4,061 | 570 | 4,631 | ||||||||||||
Income from equity-accounted investments | 5,514 | (5,514 | ) | — | 4,090 | (4,090 | ) | — | ||||||||||
Fair value (loss) gain on investment properties, net | (17,365 | ) | 621 | (16,744 | ) | 35,432 | (790 | ) | 34,642 | |||||||||
Investment and other income (loss) | 2,887 | (336 | ) | 2,551 | (185 | ) | (58 | ) | (243 | ) | ||||||||
(1,923 | ) | (4,628 | ) | (6,551 | ) | 43,398 | (4,368 | ) | 39,030 | |||||||||
Other expenses | ||||||||||||||||||
Interest costs, net | 47,983 | 2,495 | 50,478 | 41,766 | 1,842 | 43,608 | ||||||||||||
General and administrative | 15,618 | 10 | 15,628 | 11,463 | 16 | 11,479 | ||||||||||||
Internal leasing costs | 2,725 | — | 2,725 | 2,985 | — | 2,985 | ||||||||||||
Transaction and other costs | 388 | (19 | ) | 369 | 1,175 | 16 | 1,191 | |||||||||||
66,714 | 2,486 | 69,200 | 57,389 | 1,874 | 59,263 | |||||||||||||
Income before income taxes | $ | 104,606 | $ | — | $ | 104,606 | $ | 159,877 | $ | — | $ | 159,877 | ||||||
Current income tax recovery | (13,398 | ) | — | (13,398 | ) | (181 | ) | — | (181 | ) | ||||||||
Net income | $ | 118,004 | $ | — | $ | 118,004 | $ | 160,058 | $ | — | $ | 160,058 |
NOI and Same Property NOI
The following table reconciles operating income to NOI and Same Property NOI to NOI for the three months ended March 31, 2023 and 2022:
(thousands of dollars) | ||||||
Three months ended March 31 | 2023 | 2022 | ||||
Operating Income | $ | 173,243 | $ | 173,868 | ||
Adjusted for the following: | ||||||
Property management and other service fees | (4,819 | ) | (5,882 | ) | ||
Residential inventory gains | — | (2,033 | ) | |||
Operational lease revenue from ROU assets | 1,858 | 1,346 | ||||
NOI | $ | 170,282 | $ | 167,299 |
(thousands of dollars) | ||||
Three months ended March 31 | 2023 | 2022 | ||
Same Property NOI | $ | 151,790 | $ | 146,760 |
NOI from income producing properties: | ||||
Acquired (i) | 149 | 93 | ||
Disposed (i) | 477 | 9,619 | ||
626 | 9,712 | |||
NOI from completed properties under development | 6,006 | 4,187 | ||
NOI from properties under de-leasing under development | 2,460 | 2,495 | ||
Lease cancellation fees | 4,562 | 883 | ||
Straight-line rent adjustment | 573 | 915 | ||
NOI from residential rental | 4,265 | 2,347 | ||
NOI | $ | 170,282 | $ | 167,299 |
(i) Includes properties acquired or disposed of during the periods being compared.
Same Property NOI including completed properties under development (PUD)
(thousands of dollars, except where otherwise noted) | ||||||
Three months ended March 31 | 2023 | 2022 | % change | |||
Same Property NOI | $ | 151,790 | $ | 146,760 | 3.4 | % |
Add: | ||||||
NOI from completed PUD | 6,006 | 4,187 | ||||
Same Property NOI including completed PUD | $ | 157,796 | $ | 150,947 | 4.5 | % |
Adjusted Same Property NOI
(thousands of dollars,except where otherwise noted) | ||||||||
Three months ended March 31 | 2023 | 2022 | % change | |||||
Same Property NOI | $ | 151,790 | $ | 146,760 | 3.4 | % | ||
Add (exclude): | ||||||||
Same property provision for credit losses | 86 | 20 | ||||||
CAM/property tax settlements | (929 | ) | (381 | ) | ||||
Adjusted Same Property NOI | $ | 150,947 | $ | 146,399 | 3.1 | % |
FFO
The following table reconciles net income attributable to Unitholders to FFO for the three months ended March 31, 2023 and 2022:
(thousands of dollars, except where otherwise noted) | ||||||
Three months ended March 31 | 2023 | 2022 | ||||
Net income attributable to Unitholders | $ | 118,004 | $ | 160,058 | ||
Add back/(Deduct): | ||||||
Fair value losses (gains), net | 17,365 | (35,432 | ) | |||
Fair value (gains) losses included in equity-accounted investments | (621 | ) | 790 | |||
Internal leasing costs | 2,725 | 2,985 | ||||
Transaction (gains) losses on investment properties, net (i) | (64 | ) | 384 | |||
Transaction costs on sale of investment properties | 167 | 600 | ||||
ERP implementation costs | 3,954 | — | ||||
Change in unrealized fair value on marketable securities | 986 | — | ||||
Current income tax recovery | (13,398 | ) | (181 | ) | ||
Operational lease revenue from ROU assets | 1,354 | 946 | ||||
Operational lease expenses from ROU assets in equity-accounted investments | (12 | ) | (11 | ) | ||
Capitalized interest on equity-accounted investments (ii) | 877 | 436 | ||||
FFO | $ | 131,337 | $ | 130,575 | ||
Add back: | ||||||
Restructuring costs | 613 | 609 | ||||
FFO Adjusted | $ | 131,950 | $ | 131,184 | ||
FFO per unit - basic | $ | 0.44 | $ | 0.42 | ||
FFO per unit - diluted | $ | 0.44 | $ | 0.42 | ||
FFO Adjusted per unit - diluted | $ | 0.44 | $ | 0.42 | ||
Weighted average number of Units - basic (in thousands) | 300,362 | 309,837 | ||||
Weighted average number of Units - diluted (in thousands) | 300,547 | 310,114 | ||||
FFO for last 4 quarters | $ | 525,440 | $ | 531,521 | ||
Distributions paid for last 4 quarters | $ | 311,603 | $ | 304,433 | ||
FFO Payout Ratio | 59.3 | % | 57.3 | % |
(i) Represents net transaction gains or losses connected to certain investment properties during the period.(ii) This amount represents the interest capitalized to RioCan's equity-accounted investment in WhiteCastle New Urban Fund 2, LP, WhiteCastle New Urban Fund 3, LP, WhiteCastle New Urban Fund 4, LP, WhiteCastle New Urban Fund 5, LP, RioCan-Fieldgate JV, RC (Queensway) LP, RC (Leaside) LP- Class B and PR Bloor Street LP. This amount is not capitalized to properties under development under IFRS, but is allowed as an adjustment under REALPAC’s definition of FFO.
Development SpendingTotal Development Spending for the three months ended March 31, 2023 and 2022 is as follows:
(thousands of dollars) | ||||
Three months ended March 31 | 2023 | 2022 | ||
Development expenditures on balance sheet: | ||||
Properties under development | $ | 66,911 | $ | 61,165 |
Residential inventory | 17,551 | 28,345 | ||
RioCan's share of Development Spending from equity-accounted joint ventures | 3,885 | 2,374 | ||
Total Development Spending | $ | 88,347 | $ | 91,884 |
Total Acquisitions
Total Acquisitions for the three months ended March 31, 2023 and 2022 are as follows:
(thousands of dollars) | ||||
Three months ended March 31 | 2023 | 2022 | ||
Income producing properties | $ | — | $ | 89,948 |
Properties under development | 28,847 | 11,946 | ||
Residential inventory | — | 19,440 | ||
RioCan's share of acquisitions from equity-accounted joint ventures | — | 66,497 | ||
Total Acquisitions | $ | 28,847 | $ | 187,831 |
Total Adjusted Debt and Total Contractual Debt
The following tables reconcile total debt to Total Adjusted Debt, total assets to Total Adjusted Assets, and total debt to Total Contractual Debt as at March 31, 2023 and December 31, 2022:
As at | March 31, 2023 | December 31, 2022 | ||||||||||||||
(thousands of dollars, except where otherwise noted) | IFRS basis | Equity-accountedinvestments | RioCan'sproportionateshare | IFRS basis | Equity-accountedinvestments | RioCan'sproportionateshare | ||||||||||
Debentures payable | $ | 3,141,869 | $ | — | $ | 3,141,869 | $ | 2,942,051 | $ | — | $ | 2,942,051 | ||||
Mortgages payable | 2,721,509 | 173,758 | 2,895,267 | 2,659,180 | 172,100 | 2,831,280 | ||||||||||
Lines of credit and other bank loans | 952,425 | 96,331 | 1,048,756 | 1,141,112 | 89,187 | 1,230,299 | ||||||||||
Total debt | $ | 6,815,803 | $ | 270,089 | $ | 7,085,892 | $ | 6,742,343 | $ | 261,287 | $ | 7,003,630 | ||||
Cash and cash equivalents | 97,133 | 11,852 | 108,985 | 86,229 | 8,001 | 94,230 | ||||||||||
Total Adjusted Debt | $ | 6,718,670 | $ | 258,237 | $ | 6,976,907 | $ | 6,656,114 | $ | 253,286 | $ | 6,909,400 | ||||
Total assets | $ | 15,179,113 | $ | 305,491 | $ | 15,484,604 | $ | 15,101,859 | $ | 294,125 | $ | 15,395,984 | ||||
Cash and cash equivalents | 97,133 | 11,852 | 108,985 | 86,229 | 8,001 | 94,230 | ||||||||||
Total Adjusted Assets | $ | 15,081,980 | $ | 293,639 | $ | 15,375,619 | $ | 15,015,630 | $ | 286,124 | $ | 15,301,754 | ||||
Total Adjusted Debt to Total Adjusted Assets | 44.5 | % | 45.4 | % | 44.3 | % | 45.2 | % |
As at | March 31, 2023 | December 31, 2022 | ||||||||||||||||
(thousands of dollars) | IFRS basis | Equity-accountedinvestments | RioCan'sproportionateshare | IFRS basis | Equity-accountedinvestments | RioCan'sproportionateshare | ||||||||||||
Total debt | $ | 6,815,803 | $ | 270,089 | $ | 7,085,892 | $ | 6,742,343 | $ | 261,287 | $ | 7,003,630 | ||||||
Less: | ||||||||||||||||||
Unamortized debt financing costs, premiums and discounts on origination and debt assumed, and modifications | (18,327 | ) | (631 | ) | (18,958 | ) | (15,634 | ) | (690 | ) | (16,324 | ) | ||||||
Total Contractual Debt | 6,834,130 | 270,720 | 7,104,850 | 6,757,977 | 261,977 | 7,019,954 |
Liquidity
As at March 31, 2023, RioCan had approximately $1.7 billion of liquidity as summarized in the following table:
As at | March 31, 2023 | December 31, 2022 | ||||||||||||
(thousands of dollars) | IFRS basis | Equity-accountedinvestments | RioCan'sproportionateshare | IFRS basis | Equity-accountedinvestments | RioCan'sproportionateshare | ||||||||
Undrawn revolving unsecured operating line of credit | $ | 1,250,000 | $ | — | $ | 1,250,000 | $ | 1,116,351 | $ | — | $ | 1,116,351 | ||
Undrawn construction lines and other bank loans | 306,641 | 61,892 | 368,533 | 267,562 | 70,094 | 337,656 | ||||||||
Cash and cash equivalents | 97,133 | 11,852 | 108,985 | 86,229 | 8,001 | 94,230 | ||||||||
Liquidity | $ | 1,653,774 | $ | 73,744 | $ | 1,727,518 | $ | 1,470,142 | $ | 78,095 | $ | 1,548,237 | ||
Increase (Decrease) subsequent to quarter end from: | ||||||||||||||
Debenture redemption | (200,000 | ) | — | (200,000 | ) | |||||||||
Cash from funds held in trust for a loan receivable repayment | 62,155 | — | 62,155 | |||||||||||
Proforma Liquidity | $ | 1,515,929 | $ | 73,744 | $ | 1,589,673 |
Adjusted EBITDA
The following table reconciles consolidated net income attributable to Unitholders to Adjusted EBITDA:
Twelve months ended | March 31, 2023 | December 31, 2022 | ||||||||||||||
(thousands of dollars) | IFRS basis | Equity-accountedinvestments | RioCan'sproportionateshare | IFRS basis | Equity-accountedinvestments | RioCan'sproportionateshare | ||||||||||
Net income attributable to Unitholders | $ | 194,718 | $ | — | $ | 194,718 | $ | 236,772 | $ | — | $ | 236,772 | ||||
Add (deduct) the following items: | ||||||||||||||||
Income tax expense (recovery): | ||||||||||||||||
Current | (12,296 | ) | — | (12,296 | ) | 921 | — | 921 | ||||||||
Fair value losses on investment properties, net | 293,925 | 14,797 | 308,722 | 241,128 | 16,208 | 257,336 | ||||||||||
Change in unrealized fair value on marketable securities (i) | 4,769 | — | 4,769 | 3,783 | — | 3,783 | ||||||||||
Internal leasing costs | 11,944 | — | 11,944 | 12,204 | — | 12,204 | ||||||||||
Non-cash unit-based compensation expense | 9,269 | — | 9,269 | 9,056 | — | 9,056 | ||||||||||
Interest costs, net | 186,582 | 8,895 | 195,477 | 180,365 | 8,242 | 188,607 | ||||||||||
Restructuring costs | 4,293 | — | 4,293 | 4,289 | — | 4,289 | ||||||||||
ERP implementation costs | 3,954 | — | 3,954 | — | — | — | ||||||||||
Depreciation and amortization | 4,461 | — | 4,461 | 4,774 | — | 4,774 | ||||||||||
Transaction losses on the sale of investment properties, net (ii) | 576 | — | 576 | 1,024 | — | 1,024 | ||||||||||
Transaction costs on investment properties | 5,305 | — | 5,305 | 5,734 | 3 | 5,737 | ||||||||||
Operational lease revenue (expenses) from ROU assets | 4,494 | (47 | ) | 4,447 | 4,086 | (46 | ) | 4,040 | ||||||||
Adjusted EBITDA | $ | 711,994 | $ | 23,645 | $ | 735,639 | $ | 704,136 | $ | 24,407 | $ | 728,543 |
(i) The fair value gains and losses on marketable securities may include both the change in unrealized fair value and realized gains and losses on the sale of marketable securities. By adding back the change in unrealized fair value on marketable securities, RioCan effectively continues to include realized gains and losses on the sale of marketable securities in Adjusted EBITDA and excludes unrealized fair value gains and losses on marketable securities in Adjusted EBITDA.(ii) Includes transaction gains and losses realized on the disposition of investment properties.
Adjusted Debt to Adjusted EBITDA RatioAdjusted Debt to Adjusted EBITDA is calculated as follows:
Twelve months ended | March 31, 2023 | December 31, 2022 | ||||||||||||||||
(thousands of dollars, except where otherwise noted) | IFRS basis | Equity-accountedinvestments | RioCan'sproportionateshare | IFRS basis | Equity-accountedinvestments | RioCan'sproportionateshare | ||||||||||||
Adjusted Debt to Adjusted EBITDA | ||||||||||||||||||
Average total debt outstanding | $ | 6,797,665 | $ | 263,022 | $ | 7,060,687 | $ | 6,756,628 | $ | 251,888 | $ | 7,008,516 | ||||||
Less: average cash and cash equivalents | (78,746 | ) | (9,339 | ) | (88,085 | ) | (74,871 | ) | (8,791 | ) | (83,662 | ) | ||||||
Average Total Adjusted Debt | $ | 6,718,919 | $ | 253,683 | $ | 6,972,602 | $ | 6,681,757 | $ | 243,097 | $ | 6,924,854 | ||||||
Adjusted EBITDA (i) | $ | 711,994 | $ | 23,645 | $ | 735,639 | $ | 704,136 | $ | 24,407 | $ | 728,543 | ||||||
Adjusted Debt to Adjusted EBITDA | 9.44 | 9.48 | 9.49 | 9.51 |
(i) Adjusted EBITDA is reconciled in the immediately preceding table above.
Unencumbered Assets
The tables below summarize RioCan's Unencumbered Assets to Unsecured Debt and Percentage of Normalized NOI Generated from Unencumbered Assets as at March 31, 2023 and December 31, 2022:
As at | March 31, 2023 | December 31, 2022 | |||||||||||||||
(thousands of dollars, except where otherwise noted) | TargetedRatios | IFRSbasis | Equity-accountedinvestments | RioCan'sproportionateshare | IFRSbasis | Equity-accountedinvestments | RioCan'sproportionateshare | ||||||||||
Unencumbered Assets | $ | 8,218,961 | $ | 56,132 | $ | 8,275,093 | $ | 8,200,280 | $ | 56,228 | $ | 8,256,508 | |||||
Total Unsecured Debt | $ | 3,850,000 | $ | — | $ | 3,850,000 | $ | 3,783,649 | $ | — | $ | 3,783,649 | |||||
Unencumbered Assets to Unsecured Debt | > 200% | 213 | % | 215 | % | 217 | % | 218 | % | ||||||||
Annual Normalized NOI - total portfolio (i) | $ | 652,844 | $ | 22,700 | $ | 675,544 | $ | 646,540 | $ | 23,488 | $ | 670,028 | |||||
Annual Normalized NOI - Unencumbered Assets (i) | $ | 385,088 | $ | 3,444 | $ | 388,532 | $ | 370,804 | $ | 3,440 | $ | 374,244 | |||||
Percentage of Normalized NOI Generated from Unencumbered Assets | > 50.0% | 59.0 | % | 57.5 | % | 57.4 | % | 55.9 | % |
(i) Annual Normalized NOI are reconciled in the table below.
Three months ended March 31, 2023 | Three months ended December 31, 2022 | |||||||||||||||
(thousands of dollars) | IFRS basis | Equity-accountedinvestments | RioCan'sproportionateshare | IFRS basis | Equity-accountedinvestments | RioCan'sproportionateshare | ||||||||||
NOI (i) | $ | 170,282 | $ | 5,675 | $ | 175,957 | $ | 166,062 | $ | 5,872 | $ | 171,934 | ||||
Adjust the following: | ||||||||||||||||
Miscellaneous revenue | (1,035 | ) | — | (1,035 | ) | (802 | ) | — | (802 | ) | ||||||
Percentage rent | (1,474 | ) | — | (1,474 | ) | (3,234 | ) | — | (3,234 | ) | ||||||
Lease cancellation fees | (4,562 | ) | — | (4,562 | ) | (391 | ) | — | (391 | ) | ||||||
Normalized NOI - total portfolio | $ | 163,211 | $ | 5,675 | $ | 168,886 | $ | 161,635 | $ | 5,872 | $ | 167,507 | ||||
Annual Normalized NOI - total portfolio(ii) | $ | 652,844 | $ | 22,700 | $ | 675,544 | $ | 646,540 | $ | 23,488 | $ | 670,028 | ||||
NOI from unencumbered assets | $ | 98,065 | $ | 861 | $ | 98,926 | $ | 94,957 | $ | 860 | $ | 95,817 | ||||
Adjust the following for Unencumbered Assets: | ||||||||||||||||
Miscellaneous revenue | (519 | ) | — | (519 | ) | (518 | ) | — | (518 | ) | ||||||
Percentage rent | (1,244 | ) | — | (1,244 | ) | (1,430 | ) | — | (1,430 | ) | ||||||
Lease cancellation fees | (30 | ) | — | (30 | ) | (308 | ) | — | (308 | ) | ||||||
Normalized NOI - Unencumbered Assets | $ | 96,272 | $ | 861 | $ | 97,133 | $ | 92,701 | $ | 860 | $ | 93,561 | ||||
Annual Normalized NOI - Unencumbered Assets (ii) | $ | 385,088 | $ | 3,444 | $ | 388,532 | $ | 370,804 | $ | 3,440 | $ | 374,244 |
(i) Refer to the NOI and Same Property NOI table of this section for reconciliation from NOI to operating income.(ii) Calculated by multiplying Normalized NOI by a factor of 4.
Forward-Looking Information
This News Release contains forward-looking information within the meaning of applicable Canadian securities laws. This information reflects RioCan’s objectives, our strategies to achieve those objectives, as well as statements with respect to management’s beliefs, estimates and intentions concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Forward-looking information generally can be identified by the use of forward-looking terminology such as “outlook”, “objective”, “may”, “will”, “would”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “should”, “plan”, “continue”, or similar expressions suggesting future outcomes or events. Such forward-looking information reflects management’s current beliefs and is based on information currently available to management. All forward-looking information in this News Release is qualified by these cautionary statements. Forward-looking information is not a guarantee of future events or performance and, by its nature, is based on RioCan’s current estimates and assumptions, which are subject to numerous risks and uncertainties, including those described in the “Risks and Uncertainties” section in RioCan's MD&A for the three months ended March 31, 2023 and in our most recent Annual Information Form, which could cause actual events or results to differ materially from the forward-looking information contained in this News Release. Although the forward-looking information contained in this News Release is based upon what management believes are reasonable assumptions, there can be no assurance that actual results will be consistent with this forward-looking information.
The forward-looking statements contained in this News Release are made as of the date hereof, and should not be relied upon as representing RioCan’s views as of any date subsequent to the date of this News Release. Management undertakes no obligation, except as required by applicable law, to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise.
Contact InformationRioCan Real Estate Investment Trust Dennis Blasutti
Chief Financial Officer416-866-3033 | www.riocan.com
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