Tricon Residential Inc. (NYSE: TCN, TSX: TCN) ("Tricon" or the
"Company"), an owner, operator and developer of single-family
rental homes in the U.S. Sun Belt and multi-family rental
apartments in Canada, announced today its consolidated financial
results for the three and twelve months ended December 31,
2023.
All financial information is presented in U.S. dollars unless
otherwise indicated.
The Company's operational and financial highlights of the
quarter include:
- Net loss from continuing operations was $35.5 million in Q4
2023; basic and diluted loss per share from continuing operations
were both $0.14;
- Core funds from operations ("Core FFO") was $45.7 million and
Core FFO per share was $0.15 in Q4 2023, compared to $96.8 million
and $0.31 in the prior year, a decrease of 52.9% and 51.6%
year-over-year, respectively. The prior-year result included $50.3
million of net performance fees earned on the sale of the U.S.
multi-family rental portfolio;1
- Same home NOI growth for the single-family rental portfolio in
Q4 2023 was 6.2% year-over-year and same home NOI margin was 69.3%.
Same home operating metrics remained consistently strong, including
occupancy of 97.4%, annualized turnover of 14.8% and blended rent
growth of 6.0%;1
- The Company acquired 264 homes during the quarter for a total
acquisition cost of $75.6 million, and disposed of 135 non-core
homes for total proceeds of $49.2 million; and
- On January 19, 2024, the Company announced that it had entered
into an arrangement agreement (the "Arrangement Agreement"), under
which Blackstone Real Estate Partners X L.P. (“BREP X”) together
with Blackstone Real Estate Income Trust, Inc. (collectively with
BREP X and their respective affiliates, “Blackstone”) will acquire
all outstanding common shares of the Company and each holder of
common shares (other than Blackstone and dissenting shareholders)
will be entitled to receive $11.25 per common share in cash. The
transactions contemplated by the Arrangement Agreement
(collectively, the "Transaction") are expected to be completed in
the second quarter of 2024 and are subject to customary closing
conditions, including court approval, the approval of Tricon
shareholders and regulatory approval under the Canadian Competition
Act (which was obtained on February 19, 2024) and Investment Canada
Act. Subject to and upon completion of the Transaction, the Company
expects that the common shares will no longer be listed on the NYSE
or TSX and that the Company will apply to cease to be a reporting
issuer under applicable Canadian securities laws.
“Tricon ended 2023 on a high note, with strong same home NOI
growth of 6.2% and Core FFO per share of $0.56 for the year,
solidly within the range of our financial guidance. We achieved
these results in the face of economic uncertainty and rising
interest rates, while delivering an exceptional resident
experience”, said Gary Berman, President & CEO of Tricon. “I
would like to commend the entire Tricon team for their commitment
to resident satisfaction and operational excellence that are
instrumental to our success.”
Financial Highlights
For the periods ended December
31
Three months
Twelve months
(in thousands of U.S. dollars,
except per share amounts which are in U.S. dollars, unless
otherwise indicated)
2023
2022
2023
2022
Financial highlights on a consolidated
basis
Net (loss) income from continuing
operations, including:
$
(35,470
)
$
55,883
$
121,824
$
779,374
Fair value gain on rental properties
2,029
56,414
210,936
858,987
Basic (loss) earnings per share
attributable to shareholders of Tricon from continuing
operations
(0.14
)
0.19
0.42
2.82
Diluted (loss) earnings per share
attributable to shareholders of Tricon from continuing
operations
(0.14
)
0.11
0.41
1.98
Net income from discontinued
operations
—
1,829
—
35,106
Basic earnings per share attributable to
shareholders of Tricon from discontinued operations
—
0.01
—
0.13
Diluted earnings per share attributable to
shareholders of Tricon from discontinued operations
—
0.01
—
0.11
Dividends per share
$
0.058
$
0.058
$
0.232
$
0.232
Weighted average shares outstanding -
basic
273,847,034
274,684,779
273,657,451
274,483,264
Weighted average shares outstanding -
diluted
275,664,083
311,222,080
275,543,799
311,100,493
Non-IFRS(1) measures on a proportionate
basis
Core funds from operations ("Core
FFO")
$
45,651
$
96,841
$
172,597
$
237,288
Adjusted funds from operations
("AFFO")
38,159
88,694
139,110
198,264
Core FFO per share(2)
0.15
0.31
0.56
0.76
AFFO per share(2)
0.12
0.28
0.45
0.64
(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) 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 Tricon PIPE LLC, which were
310,408,201 and 310,287,917 for the three and twelve months ended
December 31, 2023, and 311,222,080 and 311,100,493 for the three
and twelve months ended December 31, 2022, respectively.
Net loss from continuing operations in the fourth quarter of
2023 was $35.5 million compared to net income of $55.9 million in
the fourth quarter of 2022, and included:
- Fair value gain on rental properties of $2.0 million compared
to $56.4 million in the fourth quarter of 2022, attributable to a
moderation in home price appreciation within the single-family
rental portfolio.
- Fair value loss of $23.2 million on derivative financial
instruments compared to a gain of $25.8 million in the fourth
quarter of 2022, and foreign exchange loss of $13.9 million
compared to $0.2 million in the prior year period. The fair value
loss on derivative financial instruments was primarily driven by an
unrealized loss on the exchange and redemption options associated
with the preferred units issued by Tricon PIPE LLC, correlated with
an increase in Tricon's share price.
- Revenue from single-family rental properties increased by 14.3%
to $206.8 million from $180.9 million in the fourth quarter of
2022, driven primarily by growth of 3.6% in the single-family
rental portfolio to 37,183 homes, a 3.2% increase in total
portfolio occupancy to 95.0%, and a 5.2% year-over-year increase in
average effective monthly rent.
- Direct operating expenses increased by 15.7% to $67.5 million
from $58.4 million in the fourth quarter of 2022, primarily
reflecting an expansion in the rental portfolio and higher property
tax expenses associated with increasing property value assessments,
as well as general cost and labor market inflationary
pressures.
- Revenue from strategic capital services (previously reported as
Revenue from private funds and advisory services) of $19.6 million
compared to $14.8 million in the fourth quarter of 2022, primarily
attributable to a $6.2 million increase in performance fees earned
from the U.S. residential development portfolio, partially offset
by a decrease in property management fees of $1.5 million following
the Company's sale of the U.S. multi-family rental portfolio in
October 2022.
- Interest expense of $80.3 million compared to $71.1 million in
the fourth quarter of 2022, attributable to a 0.12% increase in the
weighted average interest rate, driven by elevated benchmark
interest rates, in addition to an increase in the outstanding debt
balance ($5.8 billion as at December 31, 2023 compared to $5.7
billion as at December 31, 2022).
Net income from continuing operations for the year ended
December 31, 2023 was $121.8 million compared to $779.4 million for
the year ended December 31, 2022, and included:
- Fair value gain on rental properties of $210.9 million compared
to $859.0 million in the prior year for the same reasons discussed
above.
- Revenue from single-family rental properties of $795.3 million
and direct operating expenses of $261.9 million compared to $645.6
million and $209.1 million in the prior year, respectively, which
translated to a net operating income ("NOI") increase of $96.9
million, attributable to the continued expansion of the
single-family rental portfolio and strong rent growth.
- Revenue from strategic capital services of $54.5 million
compared to $160.1 million in the prior year, primarily
attributable to $99.9 million of performance fees earned from the
sale of Tricon’s remaining 20% equity interest in the U.S.
multi-family rental portfolio in October 2022.
- Interest expense of $316.5 million compared to $213.9 million
in the prior year, primarily attributable to a 0.74% increase in
the weighted average interest rate, as discussed above, in addition
to a 14.4% increase in the average outstanding debt balance
throughout the year.
Core FFO for the fourth quarter of 2023 was $45.7 million, a
decrease of $51.2 million or 53% compared to $96.8 million in the
fourth quarter of 2022. A year-over-year variance of $50.3 million
in Core FFO is attributable to net performance fees recognized in
the fourth quarter of 2022 with respect to the sale of Tricon's
remaining 20% equity interest in the U.S. multi-family rental
portfolio. This reduction was partly offset by NOI growth in the
SFR business and strong performance from U.S. residential
developments. During the twelve months ended December 31, 2023,
Core FFO decreased by $64.7 million or 27% to $172.6 million
compared to $237.3 million in the prior year, for the reasons noted
above.
AFFO for the three and twelve months ended December 31, 2023 was
$38.2 million and $139.1 million, respectively, a decrease of $50.5
million (57%) and $59.2 million (30%) from the same periods in the
prior year. This change in AFFO was driven by the decrease in Core
FFO discussed above, partially offset by lower recurring capital
expenditures as a result of disciplined cost containment and
scoping refinement when turning homes, and the absence of recurring
capital expenditures from the U.S. multi-family rental portfolio
following its sale.
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
exclude 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 periods ended December
31
Three months
Twelve months
(in thousands of U.S. dollars,
except percentages and homes)
2023
2022
2023
2022
Total rental homes managed
37,716
36,259
Total proportionate net operating
income (NOI)(1)
$
80,300
$
73,744
$
309,538
$
275,543
Total proportionate net operating
income (NOI) growth(1)
8.9
%
24.2
%
12.3
%
24.3
%
Same home net operating income
(NOI) margin(1)
69.3
%
69.8
%
69.0
%
69.0
%
Same home net operating income
(NOI) growth(1)
6.2
%
N/A
6.2
%
N/A
Same home occupancy
97.4
%
97.6
%
97.4
%
97.8
%
Same home annualized turnover
14.8
%
13.2
%
16.8
%
17.2
%
Same home average quarterly rent
growth - renewal
6.6
%
6.8
%
6.6
%
6.5
%
Same home average quarterly rent
growth - new move-in
3.7
%
9.8
%
7.7
%
15.5
%
Same home average quarterly rent
growth - blended
6.0
%
7.3
%
6.9
%
8.2
%
(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.
Single-family rental NOI was $80.3 million for the fourth
quarter of 2023, an increase of $6.6 million or 8.9% compared to
the same period in 2022. The growth in NOI was primarily
attributable to a $9.9 million or 9.6% increase in rental revenues
as a result of a 5.5% increase in the average monthly rent ($1,837
in Q4 2023 compared to $1,741 in Q4 2022), 2.5% portfolio growth
(Tricon's proportionate share of rental homes was 21,994 in Q4 2023
compared to 21,464 in Q4 2022), and a 0.4% increase in occupancy
(94.6% in Q4 2023 compared to 94.2% in Q4 2022). This favorable
growth in rental revenue was partially offset by a $4.4 million or
12.9% increase in direct operating expenses reflecting incremental
costs associated with a larger portfolio of homes, higher property
taxes from increased assessed property values, elevated property
management costs reflecting a tighter labor market and higher other
direct costs associated with smart-home technology and higher
utility rates.
Single-family rental same home NOI growth was 6.2% in the fourth
quarter of 2023 compared to the same period last year. This
favorable change was driven by a 6.9% increase in revenue from
rental properties as a result of a 5.9% higher average monthly rent
($1,782 in Q4 2023 compared to $1,682 in Q4 2022), and an
improvement in bad debt (0.6% in Q4 2023 compared to 1.3% in Q4
2022), partially offset by slightly lower occupancy (97.4% in Q4
2023 compared to 97.6% in Q4 2022). Same home operating expense
increased by 8.5%, attributable primarily to a 14.5% increase in
property taxes, partially offset by proactive cost containment in
repair and maintenance expenses.
Single-Family Rental Investment
Activity
The Company expanded its single-family rental portfolio during
the quarter by acquiring 264 homes (254 wholly-owned homes for
$71.2 million and ten homes owned through joint ventures for $4.4
million), bringing its total managed portfolio to 37,716 homes. The
homes were purchased at an average cost per home of $286,000,
including up-front renovations, for a total acquisition cost of
$75.6 million, of which Tricon's share was approximately $72.6
million.
During the quarter, Tricon also disposed of 135 homes for a
total of $49.2 million (132 wholly-owned homes for $48.5 million
and three homes owned through joint ventures for $0.7 million) at
an average price of $365,000 per home.
Adjacent Residential Businesses
Highlights
Quarterly highlights of the Company's adjacent residential
businesses include:
- In the Canadian multi-family business, the proportionate total
portfolio's occupancy remained strong at 96.9%, and included The
Taylor as a stabilized property for the first time this quarter. At
The Selby, annualized turnover was 17.6% compared to 24.0% during
the same period in the prior year. Blended rent growth was 6.6%
during the quarter, driven by healthy new-lease and renewal rent
growth.
- In Tricon's Canadian residential development portfolio, The Ivy
welcomed its first residents to the 231-unit mixed-use rental
community during the quarter, and 15% of the building was leased as
of December 31, 2023. Leasing velocity at Maple House continued to
gain momentum, with 34% of its units leased as of December 31,
2023, reflecting the positive market response to Maple House’s
location, design and architecture.
- Tricon's investments in U.S. residential developments generated
$20.4 million of distributions to the Company in Q4 2023, including
$6.2 million in performance fees. The U.S. residential developments
also generated investment income of $6.9 million, an increase of
$3.0 million from the same period in the prior year. The increase
was primarily driven by strong demand for new housing, bolstered by
builders offering customer incentives to maintain a healthy sales
velocity despite escalating mortgage rates.
Balance Sheet and
Liquidity
Tricon's liquidity consists of a $500 million corporate credit
facility with approximately $330 million of undrawn capacity as at
December 31, 2023. The Company also had approximately $171 million
of unrestricted cash on hand, resulting in total liquidity of $501
million.
As at December 31, 2023, Tricon’s pro-rata net debt (excluding
exchangeable instruments) was $3.0 billion, reflecting a pro-rata
net debt to assets ratio of 37.4%. For the three months ended
December 31, 2023, Tricon's pro-rata net debt to Adjusted EBITDAre
ratio was 8.4x.2
2023 Guidance Update
The following table shows the most recent guidance and actual
results for the Company's Core FFO per share, same home metrics and
acquisitions for the year ended December 31, 2023. Tricon achieved
Core FFO per share and same home results that were near the
midpoint of guidance, and slightly exceeded its acquisitions
guidance for the year.
For the year ended December 31
(in billions of U.S. dollars, except per
share amounts which are in U.S. dollars, unless otherwise
indicated)
2023 Recent guidance
2023 Actual
Core FFO per share
$0.55
-
0.58
$0.56
Same home revenue growth
6.0%
-
6.5%
6.3%
Same home expense growth
6.0%
-
6.5%
6.3%
Same home NOI growth
6.0%
-
6.5%
6.2%
Single-family rental acquisitions
(homes)(1)
~1,850
1,888
Single-family rental acquisitions ($ in
billions)(1)
~$0.6
$0.6
(1) Single-family rental
acquisition costs include initial purchase price, closing costs and
up-front renovation costs. These acquisition home counts and costs
are presented on a consolidated basis and Tricon's share represents
approximately 60%.
Note: Non-IFRS measures are
presented to illustrate alternative relevant measures to assess the
Company's performance. Refer to the “Non-IFRS Measures” section and
Section 6 of the Company's MD&A for definitions.
Quarterly Dividend
Pursuant to and during the pendency of the Arrangement
Agreement, the Company intends that its regularly quarterly
dividend will not be declared and has agreed that the dividend
reinvestment plan will be suspended. If the Arrangement Agreement
is terminated, the Company intends to resume declaring and paying
regular quarterly dividends on the common shares and to reinstate
its dividend reinvestment plan.
About this press release
This press release should be read in conjunction with the
Company’s Financial Statements and Management’s Discussion and
Analysis (the "MD&A") for the year ended December 31, 2023,
which are available on Tricon’s website at
www.triconresidential.com and have been filed under the Company's
profile on SEDAR+ (www.sedarplus.ca) as well as with the SEC as
part of the Company’s annual report filed on Form 40-F. The
financial information therein is presented in U.S. dollars.
Shareholders have the ability to receive a hard copy of the
complete audited Financial Statements free of charge upon request.
The Company will not be holding a conference call following the
release.
The Company has also made available on its website supplemental
information for the three and twelve months ended December 31,
2023. For more information, visit www.triconresidential.com.
More information concerning the Transaction can be found in the
Company’s management information circular dated February 15, 2024,
which has been filed under the Company’s profile on SEDAR+
(www.sedarplus.ca) and EDGAR (www.sec.gov).
About Tricon Residential
Inc.
Tricon Residential Inc. (NYSE: TCN, TSX: TCN) is an owner,
operator and developer of a growing portfolio of approximately
38,000 single-family rental homes in the U.S. Sun Belt and
multi-family apartments in Canada. Our commitment to enriching the
lives of our employees, residents and local communities underpins
Tricon’s culture and business philosophy. We provide high-quality
rental housing options for families across the United States and
Canada through our technology-enabled operating platform and
dedicated on-the-ground operating teams. Our development programs
are also delivering thousands of new rental homes and apartments as
part of our commitment to help solve the housing supply shortage.
At Tricon, we imagine a world where housing unlocks life’s
potential. For more information, visit
www.triconresidential.com.
* * * *
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; the Company's growth
plans; the pace, availability and pricing of anticipated home
acquisitions; anticipated rent growth, fee income and other
revenue; development plans, costs and timelines; and the impact of
such factors on the Company. This news release also contains
forward-looking statements pertaining to the anticipated benefits
of the Transaction; shareholder approvals, court approval, required
regulatory approvals and other conditions required to complete the
Transaction; the anticipated timing of the completion of the
Transaction; future distributions by the Company; and the
de-listing of the Common Shares from the TSX and the NYSE and
ceasing to be a reporting issuer. All 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 failure to obtain necessary approvals or
satisfy (or obtain a waiver of) the conditions to closing the
Transaction, the occurrence of any event, change or other
circumstance that could give rise to the termination of the
Transaction, the Company or Blackstone’s failure to consummate the
Transaction when required or on the terms as originally negotiated,
risks related to the disruption of management time from ongoing
business operations due to the Transaction and possible
difficulties in maintaining customer, supplier, key personnel and
other strategic relationships, potential litigation relating to the
Transaction, including the effects of any outcomes related thereto,
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 U.S. real estate markets; changes in the attitudes,
financial condition and demand of the Company's demographic
markets; rising interest rates and volatility in financial markets;
the potential impact of reduced supply of labor and materials on
expected costs and timelines; rates of inflation and economic
uncertainty; developments and changes in applicable laws and
regulations; and the aftermath of COVID-19. Accordingly, 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 disclaims any intention or obligation to update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise, unless required by
applicable law.
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 periods ended December 31
Three months
Twelve months
(in thousands of U.S. dollars)
2023
2022
Variance
2023
2022
Variance
Net (loss) income from continuing
operations attributable to Tricon's shareholders
$
(38,260
)
$
53,339
$
(91,599
)
$
114,190
$
773,835
$
(659,645
)
Fair value gain on rental properties
(2,029
)
(56,414
)
54,385
(210,936
)
(858,987
)
648,051
Fair value loss on Canadian development
properties
—
—
—
—
440
(440
)
Unrealized loss (gain) on derivative
financial instruments
28,183
(25,818
)
54,001
20,085
(184,809
)
204,894
Limited partners' share of FFO
adjustments
17,527
49,834
(32,307
)
113,482
283,338
(169,856
)
FFO attributable to Tricon's
shareholders
$
5,421
$
20,941
$
(15,520
)
$
36,821
$
13,817
$
23,004
Core FFO from U.S. and Canadian
multi-family rental
386
868
(482
)
970
8,173
(7,203
)
Income from equity-accounted investments
in multi-family rental properties
(4,768
)
(1,051
)
(3,717
)
(5,297
)
(1,550
)
(3,747
)
Income from equity-accounted investments
in Canadian residential developments
(1,614
)
(7,690
)
6,076
(4,348
)
(11,198
)
6,850
Performance fees revenue from the sale of
U.S. multi-family rental portfolio
—
99,866
(99,866
)
—
—
—
Performance fees payments associated with
U.S. multi-family rental divestiture
—
(49,577
)
49,577
—
(49,577
)
49,577
Current income tax adjustment
(1,077
)
—
(1,077
)
(448
)
—
(448
)
Deferred income tax expense
1,969
5,601
(3,632
)
25,899
189,179
(163,280
)
Current tax impact on sale of U.S.
multi-family rental portfolio
—
—
—
—
(29,835
)
29,835
Interest on Due to Affiliate
4,245
4,245
—
16,981
17,022
(41
)
Amortization of deferred financing costs,
discounts and lease obligations
6,638
5,581
1,057
24,481
19,284
5,197
Equity-based, non-cash and one-time
compensation(1)
8,832
8,383
449
20,851
54,716
(33,865
)
Other adjustments
25,619
9,674
15,945
56,687
27,257
29,430
Core FFO attributable to Tricon's
shareholders
$
45,651
$
96,841
$
(51,190
)
$
172,597
$
237,288
$
(64,691
)
Recurring capital expenditures(2)
(7,492
)
(8,147
)
655
(33,487
)
(39,024
)
5,537
AFFO attributable to Tricon's
shareholders
$
38,159
$
88,694
$
(50,535
)
$
139,110
$
198,264
$
(59,154
)
(1) Includes non-cash performance
fees expense. Performance fees expense is accrued based on changes
in the unrealized carried interest liability of the underlying
Investment Vehicles and is hence 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.
(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
expenditures.
RECONCILIATION OF SINGLE-FAMILY RENTAL TOTAL AND SAME HOME
NOI
For the periods ended December 31
Three months
Twelve months
(in thousands of U.S. dollars)
2023
2022
2023
2022
Net operating income (NOI), proportionate
same home portfolio
$
56,670
$
53,382
$
219,872
$
206,991
Net operating income (NOI), proportionate
non-same home
23,630
20,362
89,666
68,552
Net operating income (NOI), proportionate
total portfolio
80,300
73,744
309,538
275,543
Limited partners' share of NOI(1)
58,951
48,778
223,843
160,953
Net operating income from single-family
rental properties per financial statements
$
139,251
$
122,522
$
533,381
$
436,496
(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 December 31
(in thousands of U.S. dollars)
2023
2022
Variance
% Variance
Total revenue from rental properties
$
118,735
$
107,778
$
10,957
10.2%
Total direct operating expenses
38,435
34,034
4,401
12.9%
Net operating income (NOI)(1)
$
80,300
$
73,744
$
6,556
8.9%
Net operating income (NOI)
margin(1)
67.6%
68.4%
(1) Non-IFRS measures; refer to
Section 6 of the MD&A for definitions.
For the twelve months ended December
31
(in thousands of U.S. dollars)
2023
2022
Variance
% Variance
Total revenue from rental properties
$
458,940
$
407,227
$
51,713
12.7%
Total direct operating expenses
149,402
131,684
17,718
13.5%
Net operating income (NOI)(1)
$
309,538
$
275,543
$
33,995
12.3%
Net operating income (NOI)
margin(1)
67.4%
67.7%
(1) Non-IFRS measures; refer to
Section 6 of the MD&A for definitions.
RECONCILIATION OF PROPORTIONATE SAME HOME GROWTH
METRICS
For the three months ended December 31
(in thousands of U.S. dollars)
2023
2022
Variance
% Variance
Total revenue from rental properties
$
81,778
$
76,531
$
5,247
6.9%
Total direct operating expenses
25,108
23,149
1,959
8.5%
Net operating income (NOI)(1)
$
56,670
$
53,382
$
3,288
6.2%
Net operating income (NOI)
margin(1)
69.3%
69.8%
(1) Non-IFRS measures; refer to
Section 6 of the MD&A for definitions.
For the twelve months ended December
31
(in thousands of U.S. dollars)
2023
2022
Variance
% Variance
Total revenue from rental properties
$
318,842
$
300,083
$
18,759
6.3%
Total direct operating expenses
98,970
93,092
5,878
6.3%
Net operating income (NOI)(1)
$
219,872
$
206,991
$
12,881
6.2%
Net operating income (NOI)
margin(1)
69.0%
69.0%
(1) Non-IFRS measures; refer to
Section 6 of the MD&A for definitions.
PROPORTIONATE BALANCE SHEET
(in thousands of U.S. dollars,
except per share amounts which are in U.S. dollars, unless
otherwise specified)
Rental portfolio
Development
portfolio
Corporate
assets and
liabilities
Tricon
proportionate
results
IFRS
reconciliation
Consolidated
results/Total
A
B
C
D = A+B+C
E
D+E
Assets
Rental properties
$
7,141,499
$
—
$
—
$
7,141,499
$
5,049,293
$
12,190,792
Equity-accounted investments in
multi-family rental properties
51,925
—
—
51,925
—
51,925
Equity-accounted investments in Canadian
residential developments
—
99,336
—
99,336
—
99,336
Canadian development properties
—
169,763
—
169,763
—
169,763
Investments in U.S. residential
developments
—
154,971
—
154,971
—
154,971
Restricted cash
59,367
248
1,261
60,876
60,575
121,451
Goodwill, intangible and other assets
4,849
—
145,684
150,533
2,531
153,064
Deferred income tax assets
41,218
—
43,569
84,787
—
84,787
Cash
79,734
2,737
8,650
91,121
79,618
170,739
Other working capital items(1)
9,546
2,191
34,971
46,708
4,889
51,597
Total assets
$
7,388,138
$
429,246
$
234,135
$
8,051,519
$
5,196,906
$
13,248,425
Liabilities
Debt
$
2,756,492
$
44,939
$
182,077
$
2,983,508
$
2,794,492
$
5,778,000
Due to Affiliate
—
—
262,422
262,422
—
262,422
Other liabilities(2)
166,238
7,952
132,768
306,958
2,402,414
2,709,372
Deferred income tax liabilities
—
—
629,090
629,090
—
629,090
Total liabilities
$
2,922,730
$
52,891
$
1,206,357
$
4,181,978
$
5,196,906
$
9,378,884
Non-controlling interest
—
—
5,777
5,777
—
5,777
Net assets attributable to Tricon's
shareholders
$
4,465,408
$
376,355
$
(977,999
)
$
3,863,764
$
—
$
3,863,764
Net assets per share(3)
$
16.38
$
1.38
$
(3.59
)
$
14.17
Net assets per share (CAD)(3)
$
21.66
$
1.83
$
(4.75
)
$
18.74
(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 December 31, 2023, common shares
outstanding were 272,637,823 and the USD/CAD exchange rate was
1.3226.
TOTAL AUM
December 31, 2023
December 31, 2022
(in thousands of U.S. dollars)
Balance
% of total AUM
Balance
% of total AUM
Third-party AUM
$
8,186,312
50.1%
$
8,120,344
50.7%
Principal AUM
8,160,357
49.9%
7,882,908
49.3%
Total AUM
$
16,346,669
100.0%
$
16,003,252
100.0%
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDAre
(in thousands of U.S. dollars)
Total
proportionate
results
IFRS
reconciliation
Consolidated
results/Total
For the three months ended December 31,
2023
Net loss attributable to Tricon's
shareholders from continuing operations
$
(38,260
)
$
—
$
(38,260
)
Interest expense
41,618
38,634
80,252
Current income tax expense
503
—
503
Deferred income tax expense
1,969
—
1,969
Amortization and depreciation expense
4,525
—
4,525
Fair value loss (gain) on rental
properties
18,946
(20,975
)
(2,029
)
Unrealized loss on derivative financial
instruments
24,735
3,448
28,183
Look-through EBITDAre adjustments from
non-consolidated affiliates
(6,939
)
—
(6,939
)
EBITDAre, consolidated
$
47,097
$
21,107
$
68,204
Equity-based, non-cash and one-time
compensation
8,832
—
8,832
Other adjustments(1)
24,146
(2,013
)
22,133
Limited partners' share of EBITDAre
adjustments
—
(19,094
)
(19,094
)
Non-controlling interest's share of
EBITDAre adjustments
(150
)
—
(150
)
Adjusted EBITDAre
$
79,925
$
—
$
79,925
Adjusted EBITDAre (annualized)
$
319,700
(1) Includes the following
adjustments:
(in thousands of U.S.
dollars)
Proportionate
IFRS
reconciliation
Consolidated
Transaction costs
$
5,472
$
(2,013
)
$
3,459
Realized and unrealized foreign exchange
loss
13,928
—
13,928
Lease payments on right-of-use assets
(1,640
)
—
(1,640
)
Other EBITDAre adjustments*
6,386
—
6,386
Total other adjustments
$
24,146
$
(2,013
)
$
22,133
*For the three and twelve months
ended December 31, 2023, adjustments included professional fees
related to enterprise resource planning ("ERP") system
implementation and consulting, SOX-related system implementation
and consulting, costs incurred to process COVID-related backlogs as
well as other non-cash adjustments. These expenses are one-time in
nature and are expected to normalize in the coming months.
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 U.S. dollars)
December 31, 2023
Pro-rata assets of consolidated
entities(1)
$
7,900,258
Canadian multi-family rental
properties(2)
110,288
Canadian residential
developments(2),(3)
274,074
Pro-rata assets of non-consolidated
entities
384,362
Pro-rata assets, total
$
8,284,620
Pro-rata assets (net of cash),
total(4)
$
8,122,646
(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) In Q4 2023, The Taylor was
reclassified from the residential development segment to Tricon's
multi-family rental business segment.
(3) Excludes right-of-use assets
under ground leases of $34,649.
(4) Reflects proportionate cash
and restricted cash of $151,997 as well as pro-rata cash and
restricted cash of non-consolidated entities of $9,977.
PRO-RATA NET DEBT TO ASSETS
(in thousands of U.S. dollars, except
percentages)
December 31, 2023
Pro-rata debt of consolidated
entities
$
2,983,508
Canadian multi-family rental
properties(1)
56,295
Canadian residential
developments(1),(2)
156,428
Pro-rata debt of non-consolidated
entities
212,723
Pro-rata debt, total
$
3,196,231
Pro-rata net debt, total(3)
$
3,034,257
Pro-rata net debt to assets
37.4
%
(1) In Q4 2023, The Taylor was
reclassified from the residential development segment to Tricon's
multi-family rental business segment.
(2) Excludes lease obligations
under ground leases of $34,649.
(3) Reflects proportionate cash
and restricted cash of $151,997 as well as pro-rata cash and
restricted cash of non-consolidated entities of $9,977.
RECONCILIATION OF PRO-RATA DEBT AND ASSETS OF
NON-CONSOLIDATED ENTITIES TO CONSOLIDATED BALANCE SHEET
(in thousands of U.S. dollars)
December 31, 2023
Equity-accounted investments in
Canadian multi-family rental properties
Tricon's pro-rata share of assets(1)
$
110,288
Tricon's pro-rata share of debt
(56,295
)
Tricon's pro-rata share of working capital
and other
(2,068
)
Equity-accounted investments in
Canadian multi-family rental properties
$
51,925
Equity-accounted investments in
Canadian residential developments
Tricon's pro-rata share of
assets(1),(2)
$
274,074
Tricon's pro-rata share of debt(2)
(156,428
)
Tricon's pro-rata share of working capital
and other
(18,310
)
Equity-accounted investments in
Canadian residential developments
$
99,336
(1) In Q4 2023, The Taylor was
reclassified from the residential development segment to Tricon's
multi-family rental business segment.
(2) Excludes right-of-use assets
and lease obligations under ground leases of $34,649.
PRO-RATA NET DEBT TO ADJUSTED EBITDAre
(in thousands of U.S. dollars)
December 31, 2023
Pro-rata debt of consolidated entities,
excluding facilities related to non-income generating
assets(1)
$
2,785,267
Canadian multi-family rental properties
debt
56,295
Pro-rata debt of non-consolidated
entities (stabilized properties)
56,295
Pro-rata debt (stabilized properties),
total
$
2,841,562
Pro-rata net debt (stabilized
properties), total(2)
$
2,686,950
Adjusted EBITDAre
(annualized)(3)
$
319,700
Pro-rata net debt to Adjusted EBITDAre
(annualized)
8.4x
(1) Excludes $44,939 of
development debt directly related to the consolidated Canadian
development portfolio and $153,302 of warehouse facilities related
to acquisitions of vacant single-family homes, which do not fully
contribute to Adjusted EBITDAre.
(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 $149,012 as well as pro-rata cash and restricted cash
of non-consolidated entities for stabilized properties of
$5,600.
(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 are 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 National Association of Real
Estate Investment Trusts (“NAREIT”). In addition to the adjustments
prescribed by NAREIT, Tricon excludes fair value gains that arise
as a result of reporting under IFRS.
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 net of applicable resident
recoveries 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/20240227103750/en/
For further information, please
contact:
Wissam Francis EVP & Chief Financial Officer
Wojtek Nowak Managing Director, Capital Markets
Email: IR@triconresidential.com
Tricon Residential (NYSE:TCN)
과거 데이터 주식 차트
부터 11월(11) 2024 으로 12월(12) 2024
Tricon Residential (NYSE:TCN)
과거 데이터 주식 차트
부터 12월(12) 2023 으로 12월(12) 2024