Tricon Reports Strong Q1 2022 Results and Updates Full-Year Guidance
Tricon Residential reported impressive Q1 2022 results with a 290% year-over-year increase in net income from continuing operations to $163.5 million. Diluted earnings per share surged 181% to $0.59. Core FFO per share rose 7.7% to $0.14, supported by a 32% increase in net operating income (NOI) from single-family rentals. The company expanded its portfolio by 1,935 homes, achieving a record 98% occupancy rate. Guidance for same home NOI growth was boosted to 7.5% to 9.5% for the year.
- Net income from continuing operations increased by 290% to $163.5 million.
- Diluted earnings per share from continuing operations rose by 181% to $0.59.
- Core FFO per share increased by 7.7% to $0.14, reflecting overall Core FFO growth of 32%.
- Same home NOI grew by 11.6% to $63.3 million.
- Same home occupancy reached a record high of 98.0%.
- 26% increase in weighted average diluted shares outstanding due to public offering.
- Direct operating expenses rose by 37% due to expansion and inflationary pressures.
All financial information is presented in
The Company reported strong operational and financial results in the first quarter, including the following highlights:
-
Net income from continuing operations increased by
290% year-over-year to compared to$163.5 million in Q1 2021; diluted earnings per share from continuing operations increased by$41.9 million 181% year-over-year to compared to$0.59 per share in Q1 2021;$0.21
-
Core FFO per share increased by
7.7% to , reflecting overall Core FFO growth of$0.14 32% driven by strong operating fundamentals and continued growth in the single-family rental portfolio, as well as higher fees generated from new Investment Vehicles created over the past year, partially offset by a26% increase in weighted average diluted shares outstanding stemming largely from Tricon'sU.S. public offering inOctober 2021 ;1
-
Same home Net Operating Income ("NOI") for the single-family rental portfolio grew by
11.6% year-over-year and same home NOI margin increased by0.7% to67.8% . Same home occupancy increased by0.7% year-over-year to a record-high of98.0% , same home turnover hit a record low of14.7% and blended rent growth was8.7% (comprised of new lease rent growth of18.7% and renewal rent growth of6.3% );
-
The Company expanded its single-family rental portfolio by
6.5% (32% year-over-year) during the quarter through the organic acquisition of 1,935 homes at an average price of per home (including closing and up-front renovations costs) for a total acquisition cost of$347,000 , of which Tricon's proportionate share was$671 million ; and$202 million
-
Positive trends continued into the second quarter, with same home rent growth of
8.6% inApril 2022 , including17.9% growth on new leases and6.5% growth on renewals, while same home occupancy increased to98.4% and same home turnover remained low at14.2% . The steady pace of acquisitions is expected to continue and management is on track to reach its target of 8,000 home acquisitions in 2022.
“After a tremendous 2021 highlighted by significant public and private capital raising, Tricon's management team focused squarely on growth and operating performance to deliver a solid first quarter of 2022 featuring a
Financial Highlights
For the three months ended |
|
|
||||
(in thousands of |
|
2022 |
|
2021 |
|
|
|
|
|
||||
Financial highlights on a consolidated basis |
|
|
||||
Net income from continuing operations, including: |
$ |
163,457 |
$ |
41,904 |
|
|
Fair value gain on rental properties |
|
299,572 |
|
112,302 |
|
|
|
|
|
||||
Basic earnings per share attributable to shareholders of Tricon from continuing operations |
|
0.59 |
|
0.21 |
|
|
Diluted earnings per share attributable to shareholders of Tricon from continuing operations |
|
0.59 |
|
0.21 |
|
|
|
|
|
||||
Net loss from discontinued operations |
|
— |
|
(67,562 |
) |
|
Basic loss per share attributable to shareholders of Tricon from discontinued operations |
|
— |
|
(0.34 |
) |
|
Diluted loss per share attributable to shareholders of Tricon from discontinued operations |
|
— |
|
(0.35 |
) |
|
|
|
|
||||
Dividends per share(1) |
$ |
0.058 |
$ |
0.056 |
|
|
|
|
|
||||
Weighted average shares outstanding - basic |
|
274,064,375 |
|
194,898,627 |
|
|
Weighted average shares outstanding - diluted |
|
276,763,567 |
|
196,327,468 |
|
|
|
|
|
||||
Non-IFRS(2) measures on a proportionate basis |
|
|
||||
Core funds from operations ("Core FFO") |
$ |
43,035 |
$ |
32,522 |
|
|
Adjusted funds from operations ("AFFO") |
|
33,658 |
|
25,817 |
|
|
|
|
|
||||
Core FFO per share(3) |
|
0.14 |
|
0.13 |
|
|
AFFO per share(3) |
|
0.11 |
|
0.10 |
|
|
|
|
|
(1) Dividends are issued and paid in |
(2) Non-IFRS measures are presented to illustrate alternative relevant measures to assess the Company's performance. For the basis of presentation of the Company’s Non-IFRS measures and reconciliations, refer to the “Non-IFRS Measures” and Appendix A. For definitions of the Company’s Non-IFRS measures, refer to Section 6 of Tricon's MD&A. |
(3) Core FFO per share and AFFO per share are calculated using the total number of weighted average potential dilutive shares outstanding, including the assumed exchange of preferred units issued by |
Net income from continuing operations in the first quarter of 2022 was
-
Revenue from single-family rental properties of
compared to$138.8 million in the first quarter of 2021, largely as a result of a$99.4 million 32% expansion in the single-family rental portfolio to 31,032 homes and a9.6% year-over-year increase in average effective monthly rent (from to$1,483 ), partially offset by a$1,625 2.5% decrease in occupancy driven by an accelerated pace of acquisition of vacant homes.
-
Direct operating expenses of
compared to$45.5 million in the first quarter of 2021, primarily driven by the growth of the rental portfolio, higher property tax expenses associated with increasing property values, and elevated repairs and maintenance expenses as a result of an increased number and scope of work orders, and general inflationary pressures reflecting a tighter labor market and rising material costs.$33.2 million
-
Revenue from private funds and advisory services of
compared to$12.4 million in the first quarter of 2021, largely driven by property management and asset management fees from the$8.9 million U.S. multi-family portfolio after its syndication and the internalization of its property management functions, as well as higher development fees generated from Johnson communities.
-
Fair value gain on rental properties of
compared to$299.6 million in the first quarter of 2021 attributable to higher home values for the single-family rental portfolio. The appreciation in home prices reflected a number of factors, including strong population and job growth in the$112.3 million U.S. Sun Belt markets and a relatively low supply of existing and new homes for sale.
Core funds from operations ("Core FFO") for the first quarter of 2022 was
Adjusted funds from operations ("AFFO") for the three months ended
Single-Family Rental Operating Highlights
The measures presented in the table below and throughout this press release are on a proportionate basis, reflecting only the portion attributable to Tricon's shareholders based on the Company's ownership percentage of the underlying entities and excludes the percentage associated with non-controlling and limited partners' interests, unless otherwise stated. A list of these measures, together with a description of the information each measure reflects and the reasons why management believes the measure to be useful or relevant in evaluating the underlying performance of the Company’s businesses, is set out in Section 6 of Tricon's MD&A.
For the three months ended |
|
|
||||
(in thousands of |
|
2022 |
|
|
2021 |
|
|
|
|
||||
Total rental homes managed |
|
31,146 |
|
|
23,535 |
|
Total proportionate net operating income (NOI)(1) |
$ |
63,291 |
|
$ |
51,627 |
|
Total proportionate net operating income (NOI) growth(1) |
|
22.6 |
% |
|
8.3 |
% |
Same home net operating income (NOI) margin(1) |
|
67.8 |
% |
|
67.1 |
% |
Same home net operating income (NOI) growth(1) |
|
11.6 |
% |
|
N/A |
|
Same home occupancy |
|
98.0 |
% |
|
97.3 |
% |
Same home annualized turnover |
|
14.7 |
% |
|
21.2 |
% |
Same home average quarterly rent growth - renewal |
|
6.3 |
% |
|
4.0 |
% |
Same home average quarterly rent growth - new move-in |
|
18.7 |
% |
|
12.3 |
% |
Same home average quarterly rent growth - blended |
|
8.7 |
% |
|
6.5 |
% |
(1) Non-IFRS measures are presented to illustrate alternative relevant measures to assess the Company's performance. For the basis of presentation of the Company’s Non-IFRS measures and reconciliations, refer to the “Non-IFRS measures” and Appendix A. For definitions of the Company’s Non-IFRS measures, refer to Section 6 of Tricon's MD&A. |
Single-family rental NOI was
Single-family rental same home NOI growth was
Single-Family Rental Investment Activity
The Company continued to expand its single-family rental portfolio through the acquisition of an additional 1,935 homes during the quarter, bringing its total managed portfolio to 31,032 rental homes. The homes were purchased at an average cost per home of
Adjacent Residential Businesses Highlights
Quarterly highlights of the Company's adjacent residential businesses include:
-
Tricon's share of
U.S. multi-family rental NOI was compared to$3.8 million for the same period in 2021, a$3.2 million or$0.6 million 17.5% increase on a same-property basis. The growth in NOI is primarily attributable to a or$0.7 million 12.8% year-over-year increase in revenue driven by a10.7% year-over-year increase in average monthly rent, aided by a0.9% year-over-year improvement in occupancy to95.5% . Total operating expenses moderately increased by to$0.2 million attributable to increased usage and rising prices of third-party contract services, partially offset by a decline in marketing and leasing costs due to stronger leasing demand;$2.5 million
-
In the Canadian multi-family business, The Selby experienced a surge in leasing activity, with occupancy increasing
14.3% year-over-year and blended rent growth of9.4% , resulting in year-over-year NOI growth of24.2% ;
-
Across Tricon's Canadian residential developments portfolio, construction continues to progress on schedule, with the majority of projects under construction being funded by construction loans. Of note, Queen &
Ontario and theCanary Landing (WestDon Lands ) - Block 20 projects are on schedule to begin construction in Q2 2022, and The Taylor andCanary Landing (WestDon Lands ) - Block 8 projects are on schedule to achieve their first occupancy by the end of 2022;
-
The Company and
Canada Pension Plan Investment Board ("CPPIB") successfully closed on their second joint venture investment ("Symington"), a 1.95 acre development site in the Junction, one ofToronto's character neighborhoods undergoing rapid gentrification. Once complete, the project will be a 17-story, 341-unit rental apartment community; and
-
Tricon's investments in
U.S. residential developments generated of distributions to the Company in Q1 2022, including$11.9 million in performance fees.$0.7 million
Change in Net Assets
As at
Balance Sheet and Liquidity
Tricon's liquidity consists of a
As at
On
2022 Guidance Update
As a result of the strong operating performance during the first quarter, the Company updated its guidance for the Core FFO per share and same home metrics for the current fiscal year as follows:
For the year ended |
Current
|
Previous
|
||||||||||||
|
||||||||||||||
Core FFO per share |
$ |
0.60 |
|
- |
$ |
0.64 |
|
$ |
0.60 |
|
- |
$ |
0.64 |
|
|
||||||||||||||
Same home revenue growth |
|
7.5 |
% |
|
9.5 |
% |
|
7.0 |
% |
- |
|
9.0 |
% |
|
Same home expense growth |
|
7.0 |
% |
|
9.0 |
% |
|
6.5 |
% |
- |
|
8.5 |
% |
|
Same home NOI growth |
|
7.5 |
% |
|
9.5 |
% |
|
7.0 |
% |
- |
|
9.0 |
% |
|
Single-family rental home acquisitions |
8,000+ |
8,000+ |
||||||||||||
Note: Non-IFRS measures are presented to illustrate alternative relevant measures to assess the Company's performance. Refer to the “Non-IFRS Measures” and Section 6 of the Company's MD&A for definitions. See also the “Forward-Looking Information” section, as the figures presented above are considered to be “financial outlook” for purposes of applicable securities laws and may not be appropriate for purposes other than to understand management’s current expectations relating to the future of the Company. The reader is cautioned that this information is forward-looking and actual results may vary materially from those reported. Although the Company believes that its anticipated future results, performance or achievements expressed or implied by the forward-looking statements and information are based upon reasonable assumptions and expectations, the reader should not place undue reliance on forward-looking statements and information. The Company reviews its key assumptions regularly and may change its outlook on a going-forward basis if necessary. |
Quarterly Dividend
On
Tricon’s dividends are designated as eligible dividends for Canadian tax purposes in accordance with subsection 89(14) of the Income Tax Act (
Conference Call and Webcast
Management will host a conference call at
This press release should be read in conjunction with the Company’s Interim Financial Statements and Management’s Discussion and Analysis (the "MD&A") for the three months ended
The Company has also made available on its website supplemental information for the three months ended
About
Forward-Looking Information
This news release contains forward-looking statements pertaining to expected future events, financial and operating results, and projections of the Company, including statements related to targeted financial performance and leverage, anticipated home acquisitions, the single-family rental unit acquisition and development pipeline and the benefits to the Company of such factors. Such forward-looking information and statements involve risks and uncertainties and are based on management’s current expectations, intentions and assumptions in light of its understanding of relevant current market conditions, its business plans, and its prospects. If unknown risks arise, or if any of the assumptions underlying the forward-looking statements prove incorrect, actual results may differ materially from management expectations as projected in such forward-looking statements. Examples of such risks include, but are not limited to the Company's inability to execute its growth strategies; the impact of changing economic and market conditions, increasing competition and the effect of fluctuations and cycles in the Canadian and
Certain statements included in this press release, including with respect to 2022 guidance for Core FFO per share and same home metrics, are considered to be financial outlook for purposes of applicable securities laws, and as such, the financial outlook may not be appropriate for purposes other than to understand management’s current expectations relating to the future of the Company, as disclosed in this press release. These forward-looking statements have been approved by management to be made as at the date of this press release. Although the forward-looking statements contained in this press release are based upon what management currently believes to be reasonable assumptions (including in particular the revenue growth, expense growth and portfolio growth assumptions set out herein which themselves are based on, respectively: assumed ancillary revenue growth and continuing favorable market rent growth; increased internalization of maintenance activities and improved management efficiencies accompanying portfolio growth; and the availability of homes meeting the Company’s single-family rental acquisition objectives), there can be no assurance that actual results, performance or achievements will be consistent with these forward-looking statements. The forward-looking statements contained in this document are expressly qualified in their entirety by this cautionary statement.
Non-IFRS Measures
The Company has included herein certain non-IFRS financial measures and non-IFRS ratios, including, but not limited to: proportionate metrics, net operating income ("NOI"), NOI margin, funds from operations ("FFO"), core funds from operations ("Core FFO"), adjusted funds from operations ("AFFO"), Core FFO per share, AFFO per share, Adjusted EBITDAre as well as certain key indicators of the performance of our businesses which are supplementary financial measures. These measures are commonly used by entities in the real estate industry as useful metrics for measuring performance. We utilize these measures in managing our business, including performance measurement and capital allocation. In addition, certain of these measures are used in measuring compliance with our debt covenants. We believe that providing these performance measures on a supplemental basis is helpful to investors and shareholders in assessing the overall performance of the Company’s business. However, these measures are not recognized under and do not have any standardized meaning prescribed by IFRS as issued by the IASB, and are not necessarily comparable to similar measures presented by other publicly traded entities. These measures should be considered as supplemental in nature and not as a substitute for related financial information prepared in accordance with IFRS. Because non-IFRS financial measures, non-IFRS ratios and supplementary financial measures do not have standardized meanings prescribed under IFRS, securities regulations require that such measures be clearly defined, identified, and reconciled to their nearest IFRS measure. The calculation and reconciliation of the non-IFRS financial measures and the requisite disclosure for non-IFRS ratios used herein are provided in Appendix A below. The definitions of the Company’s Non-IFRS measures are provided in the "Glossary and Defined Terms" section as well as Section 6 of Tricon's MD&A.
The non-IFRS financial measures, non-IFRS ratios and supplementary financial measures presented herein should not be construed as alternatives to net income (loss) or cash flow from the Company’s activities, determined in accordance with IFRS, as indicators of Tricon’s financial performance. Tricon’s method of calculating these measures may differ from other issuers’ methods and, accordingly, these measures may not be comparable to similar measures presented by other publicly-traded entities.
Appendix A - Reconciliations
RECONCILIATION OF NET INCOME TO FFO, CORE FFO AND AFFO |
|||||||||
For the three months ended |
|
|
|
||||||
(in thousands of |
|
2022 |
|
|
2021 |
|
Variance |
||
|
|
|
|
||||||
Net income from continuing operations attributable to Tricon's shareholders |
$ |
162,347 |
|
$ |
41,333 |
|
$ |
121,014 |
|
|
|
|
|
||||||
Fair value gain on rental properties |
|
(299,572 |
) |
|
(112,302 |
) |
|
(187,270 |
) |
Fair value loss on derivative financial instruments and other liabilities |
|
29,362 |
|
|
37,172 |
|
|
(7,810 |
) |
Limited partners' share of FFO adjustments |
|
85,996 |
|
|
20,118 |
|
|
65,878 |
|
FFO attributable to Tricon's shareholders |
$ |
(21,867 |
) |
$ |
(13,679 |
) |
$ |
(8,188 |
) |
|
|
|
|
||||||
Core FFO from |
|
2,321 |
|
|
7,530 |
|
|
(5,209 |
) |
(Income) loss from equity-accounted investments in multi-family rental properties |
|
(17,037 |
) |
|
457 |
|
|
(17,494 |
) |
Loss from equity-accounted investments in Canadian residential developments |
|
15 |
|
|
3 |
|
|
12 |
|
Deferred income tax expense |
|
47,887 |
|
|
67,127 |
|
|
(19,240 |
) |
Current tax impact on sale of |
|
— |
|
|
(44,502 |
) |
|
44,502 |
|
Interest on convertible debentures |
|
— |
|
|
2,451 |
|
|
(2,451 |
) |
Interest on Due to Affiliate |
|
4,286 |
|
|
4,313 |
|
|
(27 |
) |
Amortization of deferred financing costs, discounts and lease obligations |
|
4,042 |
|
|
3,914 |
|
|
128 |
|
Equity-based, non-cash and non-recurring compensation(1) |
|
19,949 |
|
|
3,177 |
|
|
16,772 |
|
Other adjustments |
|
3,439 |
|
|
1,731 |
|
|
1,708 |
|
Core FFO attributable to Tricon's shareholders |
$ |
43,035 |
|
$ |
32,522 |
|
$ |
10,513 |
|
|
|
|
|
||||||
Recurring capital expenditures(2) |
|
(9,377 |
) |
|
(6,705 |
) |
|
(2,672 |
) |
AFFO attributable to Tricon's shareholders |
$ |
33,658 |
|
$ |
25,817 |
|
$ |
7,841 |
|
(1) Includes performance fees expense, which is accrued based on changes in the unrealized carried interest liability of the underlying Investment Vehicles and hence is added back to Core FFO as a non-cash expense. Performance fees are paid and deducted in arriving at Core FFO only when the associated fee revenue has been realized. No payments were made for the three months ended |
(2) Recurring capital expenditures represent ongoing costs associated with maintaining and preserving the quality of a property after it has been renovated. Capital expenditures related to renovations or value-enhancement are excluded from recurring capital expenditure. |
RECONCILIATION OF SINGLE-FAMILY RENTAL TOTAL AND SAME HOME NOI |
||||||
For the three months ended |
|
|
||||
(in thousands of |
|
2022 |
|
2021 |
||
|
|
|
||||
Net operating income (NOI), proportionate same home portfolio |
$ |
54,715 |
$ |
49,037 |
||
Net operating income (NOI), proportionate non-same home |
|
8,576 |
|
2,590 |
||
Net operating income (NOI), proportionate total portfolio |
|
63,291 |
|
51,627 |
||
Limited partners' share of NOI(1) |
|
29,982 |
|
14,545 |
||
Net operating income from single-family rental properties per financial statements |
$ |
93,273 |
$ |
66,172 |
(1) Represents the limited partners' interest in the NOI from SFR JV-1, SFR JV-2 and SFR JV-HD. |
RECONCILIATION OF PROPORTIONATE TOTAL PORTFOLIO GROWTH METRICS |
|||||||||||
For the three months ended |
|
|
|
|
|||||||
(in thousands of |
|
2022 |
|
|
2021 |
|
Variance |
% Variance |
|||
|
|
|
|
|
|||||||
Total revenue from rental properties |
$ |
94,559 |
|
$ |
77,904 |
|
$ |
16,655 |
21.4 |
% |
|
Total direct operating expenses |
|
31,268 |
|
|
26,277 |
|
|
4,991 |
19.0 |
% |
|
|
|
|
|
|
|||||||
Net operating income (NOI)(1) |
$ |
63,291 |
|
$ |
51,627 |
|
$ |
11,664 |
22.6 |
% |
|
Net operating income (NOI) margin(1) |
|
66.9 |
% |
|
66.3 |
% |
|
|
(1) Non-IFRS measures; refer to Section 6 of the MD&A for definition. |
RECONCILIATION OF PROPORTIONATE SAME HOME GROWTH METRICS |
||||||||||
For the three months ended |
|
|
|
|
||||||
(in thousands of |
|
2022 |
|
|
2021 |
|
Variance |
% Variance |
||
|
|
|
|
|
||||||
Total revenue from rental properties |
$ |
80,696 |
|
$ |
73,063 |
|
$ |
7,633 |
10.4 |
% |
Total direct operating expenses |
|
25,981 |
|
|
24,026 |
|
|
1,955 |
8.1 |
% |
|
|
|
|
|
||||||
Net operating income (NOI)(1) |
$ |
54,715 |
|
$ |
49,037 |
|
$ |
5,678 |
11.6 |
% |
Net operating income (NOI) margin(1) |
|
67.8 |
% |
|
67.1 |
% |
|
|
(1) Non-IFRS measures; refer to Section 6 of the MD&A for definition. |
RECONCILIATION OF |
||||||
For the three months ended |
|
|
||||
(in thousands of |
|
2022 |
|
|
2021 |
|
|
|
|
||||
Net operating income (NOI), proportionate portfolio |
$ |
3,812 |
|
$ |
3,245 |
|
Less: net operating income (NOI) in discontinued operations |
|
— |
|
|
(3,245 |
) |
Interest expense, proportionate portfolio |
|
(1,370 |
) |
|
— |
|
Other expenses, proportionate portfolio |
|
(259 |
) |
|
(549 |
) |
Fair value gain on multi-family rental properties, proportionate portfolio |
|
14,694 |
|
|
— |
|
Income (loss) from equity-accounted investments in |
$ |
16,877 |
|
$ |
(549 |
) |
|
|
|
||||
Net operating income (NOI), proportionate portfolio(2) |
$ |
— |
|
$ |
3,245 |
|
Net operating income (NOI), IFRS reconciliation(2) |
|
— |
|
|
12,979 |
|
Interest expense |
|
— |
|
|
(7,845 |
) |
Other expenses |
|
— |
|
|
(1,176 |
) |
Loss on sale(1) |
|
— |
|
|
(84,427 |
) |
Net income (loss) from discontinued operations before income taxes per financial statements(1) |
$ |
— |
|
$ |
(77,224 |
) |
(1) On |
(2) The total NOI from discontinued operations represents |
PROPORTIONATE BALANCE SHEET |
||||||||||||||||||
(in thousands of |
Rental portfolio |
Development
|
Corporate
|
Tricon
|
IFRS
|
Consolidated
|
||||||||||||
A |
B |
C |
D = A+B+C |
E |
D+E |
|||||||||||||
|
|
|
|
|
|
|
||||||||||||
Assets |
|
|
|
|
|
|
||||||||||||
Rental properties |
$ |
5,834,380 |
$ |
— |
$ |
— |
|
$ |
5,834,380 |
$ |
3,132,971 |
$ |
8,967,351 |
|||||
Equity-accounted investments in multi-family rental properties |
|
215,482 |
|
— |
|
— |
|
|
215,482 |
|
— |
|
215,482 |
|||||
Equity-accounted investments in Canadian residential developments |
|
— |
|
102,277 |
|
— |
|
|
102,277 |
|
— |
|
102,277 |
|||||
Canadian development properties |
|
— |
|
139,765 |
|
— |
|
|
139,765 |
|
— |
|
139,765 |
|||||
Investments in |
|
— |
|
138,084 |
|
— |
|
|
138,084 |
|
— |
|
138,084 |
|||||
Restricted cash |
|
79,259 |
|
6,498 |
|
1,336 |
|
|
87,093 |
|
50,473 |
|
137,566 |
|||||
|
|
902 |
|
|
128,154 |
|
|
129,056 |
|
1,491 |
|
130,547 |
||||||
Deferred income tax assets |
|
— |
|
— |
|
106,291 |
|
|
106,291 |
|
— |
|
106,291 |
|||||
Cash |
|
46,006 |
|
1,216 |
|
27,321 |
|
|
74,543 |
|
68,653 |
|
143,196 |
|||||
Other working capital items(1) |
|
17,978 |
|
1,828 |
|
46,570 |
|
|
66,376 |
|
20,152 |
|
86,528 |
|||||
Total assets |
$ |
6,194,007 |
$ |
389,668 |
$ |
309,672 |
|
$ |
6,893,347 |
$ |
3,273,740 |
$ |
10,167,087 |
|||||
|
|
|
|
|
|
|
||||||||||||
Liabilities |
|
|
|
|
|
|
||||||||||||
Debt |
|
2,256,987 |
|
34,591 |
|
99,063 |
|
|
2,390,641 |
|
2,003,218 |
|
4,393,859 |
|||||
Due to Affiliate |
|
— |
|
— |
|
252,930 |
|
|
252,930 |
|
— |
|
252,930 |
|||||
Other liabilities(2) |
|
123,989 |
|
4,436 |
|
381,987 |
|
|
510,412 |
|
1,270,522 |
|
1,780,934 |
|||||
Deferred income tax liabilities |
|
— |
|
— |
|
519,163 |
|
|
519,163 |
|
— |
|
519,163 |
|||||
Total liabilities |
$ |
2,380,976 |
$ |
39,027 |
$ |
1,253,143 |
|
$ |
3,673,146 |
$ |
3,273,740 |
$ |
6,946,886 |
|||||
|
|
|
|
|
|
|
||||||||||||
Non-controlling interest |
|
— |
|
— |
|
6,190 |
|
|
6,190 |
|
— |
|
6,190 |
|||||
|
|
|
|
|
|
|
||||||||||||
Net assets attributable to Tricon's shareholders |
$ |
3,813,031 |
$ |
350,641 |
$ |
(949,661 |
) |
$ |
3,214,011 |
$ |
— |
$ |
3,214,011 |
|||||
|
|
|
|
|
|
|
||||||||||||
Net assets per share(3) |
$ |
13.97 |
$ |
1.28 |
$ |
(3.48 |
) |
$ |
11.77 |
|
|
|||||||
Net assets per share (CAD)(3) |
$ |
17.46 |
$ |
1.60 |
$ |
(4.35 |
) |
$ |
14.71 |
|
|
(1) Other working capital items include amounts receivable and prepaid expenses and deposits. |
(2) Other liabilities include long-term incentive plan, performance fees liability, derivative financial instruments, other liabilities, limited partners' interests, dividends payable, resident security deposits and amounts payable and accrued liabilities. |
(3) As at |
TOTAL AUM |
|||||||||||
|
|
|
|
||||||||
(in thousands of |
Balance |
% of total AUM |
|
Balance |
% of total AUM |
||||||
|
|
|
|
|
|
||||||
Third-party AUM |
$ |
7,241,262 |
49.6 |
% |
|
$ |
6,816,668 |
49.6 |
% |
||
Principal AUM |
|
7,349,931 |
50.4 |
% |
|
|
6,919,664 |
50.4 |
% |
||
Total AUM |
$ |
14,591,193 |
100.0 |
% |
|
$ |
13,736,332 |
100.0 |
% |
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDAre |
|||||||||
(in thousands of |
Total
|
IFRS
|
Consolidated
|
||||||
|
|
|
|
||||||
For the three months ended |
|
|
|
||||||
Net income attributable to Tricon's shareholders from continuing operations |
$ |
162,347 |
|
$ |
— |
|
$ |
162,347 |
|
Interest expense |
|
23,113 |
|
|
13,741 |
|
|
36,854 |
|
Current income tax expense |
|
462 |
|
|
— |
|
|
462 |
|
Deferred income tax expense |
|
47,887 |
|
|
— |
|
|
47,887 |
|
Amortization and depreciation expense |
|
3,407 |
|
|
— |
|
|
3,407 |
|
Fair value gain on rental properties |
|
(215,375 |
) |
|
(84,197 |
) |
|
(299,572 |
) |
Fair value loss on derivative financial instruments and other liabilities |
|
31,161 |
|
|
(1,799 |
) |
|
29,362 |
|
Look-through EBITDAre adjustments from non-consolidated affiliates |
|
(12,967 |
) |
|
|
(12,967 |
) |
||
EBITDAre, consolidated |
$ |
40,035 |
|
$ |
(72,255 |
) |
$ |
(32,220 |
) |
|
|
|
|
||||||
Equity-based, non-cash and non-recurring compensation |
|
19,949 |
|
|
— |
|
|
19,949 |
|
Other adjustments(1) |
|
1,433 |
|
|
106 |
|
|
1,539 |
|
Limited partners' share of EBITDAre adjustments |
|
— |
|
|
72,149 |
|
|
72,149 |
|
Non-controlling interest's share of EBITDAre adjustments |
|
(219 |
) |
|
— |
|
|
(219 |
) |
Adjusted EBITDAre |
$ |
61,198 |
|
$ |
— |
|
$ |
61,198 |
|
|
|
|
|
||||||
Adjusted EBITDAre (annualized) |
|
|
$ |
244,792 |
|
||||
(1) Includes the following adjustments: |
(in thousands of |
Proportionate |
IFRS
|
Consolidated |
||||||
|
|
|
|
||||||
Transaction costs |
$ |
2,113 |
|
$ |
106 |
$ |
2,219 |
|
|
Realized and unrealized foreign exchange loss |
|
61 |
|
|
— |
|
61 |
|
|
Look-through other adjustments from non-consolidated affiliates |
|
(48 |
) |
|
— |
|
(48 |
) |
|
Lease payments on right-of-use assets |
|
(693 |
) |
|
— |
|
(693 |
) |
|
Total other adjustments |
$ |
1,433 |
|
$ |
106 |
$ |
1,539 |
|
PRO-RATA ASSETS
Tricon's pro-rata assets include its share of total assets of non-consolidated entities on a look-through basis, which are shown as equity-accounted investments on its proportionate balance sheet.
(in thousands of |
|
||
|
|
||
Pro-rata assets of consolidated entities(1) |
$ |
6,575,588 |
|
|
|
||
|
|
357,301 |
|
Canadian multi-family rental properties |
|
41,278 |
|
Canadian residential developments |
|
227,415 |
|
Pro-rata assets of non-consolidated entities |
|
625,994 |
|
|
|
||
Pro-rata assets, total |
$ |
7,201,582 |
|
Pro-rata assets (net of cash), total(2)(3) |
$ |
7,031,855 |
(1) Includes proportionate total assets presented in the proportionate balance sheet table above excluding equity-accounted investments in multi-family rental properties and equity-accounted investments in Canadian residential developments. |
(2) Reflects proportionate cash and restricted cash of |
(3) Non-IFRS measure. Refer to the "Glossary and Defined Terms" section for definition. |
PRO-RATA NET DEBT TO ASSETS |
|||
(in thousands of |
|
||
|
|
||
Pro-rata debt of consolidated entities |
$ |
2,390,641 |
|
|
|
||
|
|
159,796 |
|
Canadian multi-family rental properties |
|
18,959 |
|
Canadian residential developments |
|
113,394 |
|
Pro-rata debt of non-consolidated entities |
|
292,149 |
|
|
|
||
Pro-rata debt, total |
$ |
2,682,790 |
|
Pro-rata net debt, total(1)(2) |
$ |
2,513,063 |
|
|
|
||
Pro-rata net debt to assets |
|
35.7 |
% |
(1) Reflects proportionate cash and restricted cash of |
(2) Non-IFRS measure. Refer to the "Glossary and Defined Terms" section for definition. |
RECONCILIATION OF PRO-RATA DEBT AND ASSETS OF NON-CONSOLIDATED ENTITIES TO CONSOLIDATED BALANCE SHEET |
|||
(in thousands of |
|
||
|
|
||
Equity-accounted investments in |
|
||
Tricon's pro-rata share of assets |
$ |
357,301 |
|
Tricon's pro-rata share of debt |
|
(159,796 |
) |
Tricon's pro-rata share of working capital and other |
|
(3,330 |
) |
Equity-accounted investments in |
|
194,175 |
|
|
|
||
Equity-accounted investments in Canadian multi-family rental properties |
|
||
Tricon's pro-rata share of assets |
$ |
41,278 |
|
Tricon's pro-rata share of debt |
|
(18,959 |
) |
Tricon's pro-rata share of working capital and other |
|
(1,012 |
) |
Equity-accounted investments in Canadian multi-family rental properties |
|
21,307 |
|
|
|
||
Equity-accounted investments in multi-family rental properties |
$ |
215,482 |
|
|
|
||
Equity-accounted investments in Canadian residential developments |
|
||
Tricon's pro-rata share of assets |
$ |
227,415 |
|
Tricon's pro-rata share of debt |
|
(113,394 |
) |
Tricon's pro-rata share of working capital and other |
|
(11,744 |
) |
Equity-accounted investments in Canadian residential developments |
$ |
102,277 |
|
PRO-RATA NET DEBT TO ADJUSTED EBITDAre |
|||
(in thousands of |
|
||
|
|
||
Pro-rata debt of consolidated entities, excluding facilities related to non-income generating assets(1) |
$ |
1,935,409 |
|
|
|
||
|
|
159,796 |
|
Canadian multi-family rental properties debt |
|
18,959 |
|
Pro-rata debt of non-consolidated entities (stabilized properties) |
|
178,755 |
|
|
|
||
Pro-rata debt (stabilized properties), total |
$ |
2,114,164 |
|
Pro-rata net debt (stabilized properties), total(2) |
$ |
1,989,725 |
|
|
|
||
Adjusted EBITDAre (annualized)(3) |
$ |
244,792 |
|
Pro-rata net debt to Adjusted EBITDAre (annualized) |
8.1x |
(1) Excludes |
(2) Reflects proportionate cash and restricted cash (excluding cash held at development entities and excess cash held at single-family rental joint venture entities) of |
(3) Adjusted EBITDAre is a non-IFRS measure. Refer to the "Glossary and Defined Terms" section for definition and the Reconciliation of net income to adjusted EBITDAre table above. |
Glossary and Defined Terms
The non-IFRS financial measures, non-IFRS ratios, and KPI supplementary financial measures discussed throughout this press release for each of the Company’s business segments are calculated based on Tricon's proportionate share of each portfolio or business and are defined and discussed below and in Section 6 of the MD&A, which definitions and discussion and incorporated herein by reference. These measures are commonly used by entities in the real estate industry as useful metrics for measuring performance; however, they do not have any standardized meaning prescribed by IFRS and are not necessarily comparable to similar measures presented by other publicly-traded entities. These measures should be considered as supplemental in nature and not as a substitute for the related financial information prepared in accordance with IFRS. See Appendix A for a reconciliation to IFRS financial measures where applicable.
Adjusted EBITDAre is a metric that management believes to be helpful in evaluating the Company’s operating performance across and within the real estate industry. Further, management considers it to be a more accurate reflection of the Company’s leverage ratio, especially as it adjusts for and negates non-recurring and non-cash items. The Company’s definition of EBITDAre reflects all adjustments that are specified by the
EBITDAre represents net income from continuing operations, excluding the impact of interest expense, income tax expense, amortization and depreciation expense, fair value changes on rental properties, fair value changes on derivative financial instruments and adjustments to reflect the entity’s share of EBITDAre of unconsolidated entities. Adjusted EBITDAre is a normalized figure and is defined as EBITDAre before stock-based compensation, unrealized and realized foreign exchange gains and losses, transaction costs and other non-recurring items, and reflects only Tricon’s share of results from consolidated entities (by removing non-controlling interests’ and limited partners’ share of reconciling items).
The Company also discloses its Net Debt to Adjusted EBITDAre ratio to assist investors in accounting for the Company’s unconsolidated joint ventures and equity‐accounted investments, in both debt and Adjusted EBITDAre, by calculating pro‐rata leverage on a look‐through basis (excluding debt directly related to the Canadian development portfolio as well as warehouse and subscription facilities related to acquisitions of vacant single-family homes, which do not fully contribute to Adjusted EBITDAre).
Cost to maintain is defined as the annualized repairs and maintenance expense, turnover expense and recurring capital expenditures per home in service. The metric provides insight into the costs needed to maintain a property's current condition and is indicative of a portfolio's operational efficiency.
Pro-rata net assets represents the Company's proportionate share of total consolidated assets as well as assets of non-consolidated entities on a look-through basis (which are shown as equity-accounted investments on its proportionate balance sheet), less its cash and restricted cash.
Pro-rata net debt represents the Company's total current and long-term debt per its consolidated financial statements, less its cash and restricted cash (excluding debt directly related to the Canadian development portfolio as well as warehouse and subscription facilities related to acquisitions of vacant single-family homes, which do not fully contribute to Adjusted EBITDAre).
_______________________________ |
1 Non-IFRS measures are presented to illustrate alternative relevant measures to assess the Company's performance. For the basis of presentation of the Company’s Non-IFRS measures and reconciliations, refer to the “Non-IFRS Measures” section and Appendix A. For definitions of the Company’s Non-IFRS measures, refer to Section 6 of Tricon's MD&A. |
2 Non-IFRS measures are presented to illustrate alternative relevant measures to assess the Company's performance. For the basis of presentation of the Company’s Non-IFRS measures and reconciliations, refer to the “Non-IFRS Measures” section and Appendix A. For definitions of the Company’s Non-IFRS measures, refer to Section 6 of Tricon's MD&A. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20220510006272/en/
EVP & Chief Financial Officer
Managing Director, Capital Markets
Email: investorsupport@triconresidential.com
Source:
FAQ
What were Tricon Residential's earnings in Q1 2022?
How much did Tricon Residential's diluted earnings per share increase in Q1 2022?
What is the guidance for same home NOI growth for Tricon Residential in 2022?
How many homes did Tricon Residential acquire in Q1 2022?