Stock Name: GRT
Amount: CAD 0.50
Announcement Date: 08/08/2012
Record Date: 22/08/2012
Dividend Detail:
TORONTO, Aug. 8, 2012 /CNW/ - Granite Real Estate Inc. (TSX: GRT) (NYSE: GRP) ("Granite" or the "Company") today announced its results for the three
and six-month periods ended June 30, 2012 and declared a Canadian
dollar denominated dividend of $0.50 per share on the Company's Common
Shares.
"Our results for the second quarter continue to demonstrate stability in
rental revenues and overall cash flows and are in line with our
expectations. We are pleased to be reporting for the first time under
our new name, Granite Real Estate Inc. In addition, during the quarter
we relocated our Canadian and European offices. These steps as well as
several others taken during this second quarter are part of our
continuing effort to be well-positioned for stability and for future
growth" commented Tom Heslip, Chief Executive Officer.
Granite's consolidated results for the three and six-month periods ended
June 30, 2012 and 2011 are summarized below (all figures are in
Canadian ("Cdn.") dollars):
�� | �� | �� | ||||
(in thousands, except per share figures) | Three months ended June 30, | �� | Six months ended June 30, | |||
�� | �� | �� 2012 | 2011 | �� | �� 2012 | 2011 |
�� | �� | (previously reported in US dollars) | �� | �� | (previously reported in US dollars) | |
Revenues(1) | $�������������� 45,455 | $�������� 44,861 | �� | $���������� 91,115 | $�������� 89,092 | |
�� | �� | �� | �� | �� | �� | |
Income before income taxes | $������������������ 23,811 | $�������� 15,508 | �� | $���������� 46,732 | $�������� 30,978 | |
Income from continuing operations(1)(3) | ���� ���������������� 18,707 | ���� ������ 26,362 | �� | ���� �������� 37,270 | �� �������� 39,051 | |
Income from discontinued operations(1) | ������������������ ������ -- | ������������ 83,684 | �� | ������������������ ������ -- | 94,449 | |
Net income | $���������������� 18,707 | $���� 110,046 | �� | $���������� 37,270 | $���� 133,500 | |
�� | �� | �� | �� | �� | �� | �� |
Diluted earnings per share from: | �� | �� | �� | �� | �� | |
- continuing operations | $�������������������� 0.40 | $������������ 0.56 | �� | $���������������� 0.79 | $�������������� 0.83 | |
- discontinued operations | -- | ������ 1.77 | �� | �������������� -- | �������������� 2.01 | |
Diluted earnings per share | $�������������������� 0.40 | $������������ 2.33 | �� | $���������������� 0.79 | $���������������� 2.84 | |
�� | �� | �� | �� | �� | �� | |
Funds from operations ("FFO")(2) | $������������ 29,374 | $������ 36,938 | �� | $�������� 58,780 | $�������� 60,074 | |
Diluted FFO per share (2) | $�������������������� 0.63 | $������������ 0.78 | �� | $������������ �� 1.25 | $���������������� 1.28 | |
�� | �� | �� | �� | �� | �� | |
__________________________
(1)�� | Following the close of business on June 30, 2011, the Racing & Gaming Business, substantially all of the Company's lands held for development, a property in the United States and an income-producing property in Canada (the "Arrangement Transferred Assets & Business") were transferred to entities owned by Mr. Frank Stronach and his family (the "Stronach Shareholder") in consideration for the elimination of the Company's dual class share structure (the "Arrangement").�� The operating results of the Arrangement Transferred Assets & Business have been presented as discontinued operations.�� Income from continuing operations pertains to the Company's income-producing property portfolio. |
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(2)�� | FFO and diluted FFO per share are measures widely used by analysts and investors in evaluating the operating performance of real estate companies.�� However, FFO does not have a standardized meaning under U.S. generally accepted accounting principles and therefore may not be comparable to similar measures presented by other companies.�� The Company determines FFO using the definition prescribed in the United States by the National Association of Real Estate Investment Trusts��.�� For a reconciliation of FFO to income from continuing operations, please refer to the section titled "Reconciliation of Funds from Operations to Income from Continuing Operations". |
�� | �� |
(3) | Income from continuing operations for the three and six-month period ended June 30, 2011 includes the recovery of $12.9 million in income tax resulting from an internal amalgamation that was set aside and cancelled by the courts. |
CURRENCY CHANGE FOR FINANCIAL REPORTING
The consolidated financial statements for periods prior to January 1,
2012 were reported using the U.S. dollar. As a result of the Company's
shareholder base becoming increasingly Canadian and the Company's
stated intention of becoming a Canadian Real Estate Investment Trust
("REIT"), and to mitigate the impact of foreign exchange fluctuations
on our reported results, effective January 1, 2012, the Company's
reporting currency was changed to the Cdn. dollar. All comparative
financial information contained in this press release, the unaudited
interim consolidated financial statements and Management's Discussion
and Analysis for the three and six-month periods ended June 30, 2012,
has been recast to reflect the Company's results as if the information
had been historically reported in Cdn. dollars.�� As a result of the
change in reporting currency, dividends are declared in Cdn. dollars.
Please refer to the section titled "Dividends". The Company continues
to report in accordance with U.S. generally accepted accounting
principles.
GRANITE'S CONSOLIDATED FINANCIAL RESULTS
The results of operations of the Company for the three and six-month
periods ended June 30, 2012 and 2011 include those from continuing
operations and discontinued operations.
Three-Month Period Ended June 30, 2012
Continuing Operations
For the three-month period ended June 30, 2012, rental revenue increased
by $0.6 million from $44.9 million in the second quarter of 2011 to
$45.5 million in the second quarter of 2012 primarily due to completed
projects coming on-stream and the additional rent earned from
contractual rent increases partially offset by the unfavourable effects
of changes in foreign currency exchange rates.
The Company's income from continuing operations was $18.7 million in the
second quarter of 2012 compared to $26.4 million in the prior year
period. Income from continuing operations in the second quarter of 2011
includes the recovery of $12.9 million in income tax resulting from an
internal amalgamation undertaken in 2010 that was set aside and
cancelled by the Ontario Superior Court of Justice. Excluding the $12.9
million recovery of income tax, income from continuing operations
increased by $5.2 million primarily due to (i) an increase in rental
revenue of $0.6 million, (ii) a decrease in general and administrative
expenses of $5.2 million (primarily due to reduced insurance expense
and compensation expense to former executives of the Company as well as
the settlement of an outstanding legal proceeding in 2011), (iii) an
increase in foreign exchange gains of $0.5 million and (iv) a decrease
in the write-down of a long-lived asset of $2.7 million. Partially
offsetting these increases in income from continuing operations are (i)
increases in property operating costs of $0.5 million, (ii) increased
net interest expense of $0.2 million and (iii) an increase in income
tax expense of $3.1 million excluding the income tax recovery noted
above.
FFO for the second quarter of 2012 decreased $7.6 million from $36.9
million in the prior year period to $29.4 million in the current period
primarily due to lower income from continuing operations of $7.7
million.
Discontinued Operations
For the three-month period ended June 30, 2012, the Company's results of
operations were not impacted by the Arrangement Transferred Assets &
Business as they were transferred to the Stronach Shareholder effective
June 30, 2011. Income from discontinued operations for the three-month
period ended June 30, 2011 of $83.7 million is primarily comprised of
the net gain on the disposal of the Arrangement Transferred Assets &
Business of $87.4 million.
Six-Month Period Ended June 30, 2012
Continuing Operations
For the six-month period ended June 30, 2012, rental revenue increased
by $2.0 million from $89.1 million in 2011 to $91.1 million in 2012
primarily due to completed projects coming on-stream, the additional
rent earned from contractual rent increases and renewals and re-leasing
of income-producing properties partially offset by the unfavourable
effects of changes in foreign currency exchange rates.
The Company's income from continuing operations was $37.3 million in the
six-month period ended June 30, 2012 compared to $39.1 million in the
prior year period. Excluding the recovery in the second quarter of 2011
of income tax of $12.9 million noted above, income from continuing
operations increased by $11.1 million primarily due to (i) an increase
in rental revenue of $2.0 million, (ii) a reduction in general and
administrative expenses of $11.8 million (primarily related to reduced
advisory costs, decreased insurance expense, decreased compensation
expense to former executives of the Company and higher director fees in
2011 due to the Arrangement), (iii) an increase in foreign exchange
gains of $0.8 million and (iv) the decrease in the write-down of a
long-lived asset of $2.7 million. Partially offsetting these increases
are (i) an increase of $0.9 million in property operating costs, (ii)
an increase of $0.5 million in depreciation and amortization expense
and (iii) an increase of income tax expense of $4.7 million excluding
the income tax recovery noted above.
FFO for the six-month period ended June 30, 2012 decreased $1.3 million
from $60.1 million in the prior year period to $58.8 million primarily
due to the reduction in income from continuing operations of $1.8
million partially offset by the increased add back of depreciation and
amortization expense of $0.5 million.
Discontinued Operations
Income from discontinued operations for the six-month period ended June
30, 2011 of $94.4 million is primarily comprised of the net gain on the
disposal of the Arrangement Transferred Assets & Business of $87.4
million.
Net Income
Three-Month Period Ended June 30, 2012
Net income of $18.7 million for the second quarter of 2012 decreased by
$91.3 million from $110.0 million in the prior year period.�� The
decrease was due to the reductions in income from discontinued
operations of $83.7 million and income from continuing operations of
$7.7 million.
Six-Month Period Ended June 30, 2012
Net income for the six-month period ended June 30, 2012 decreased by
$96.2 million to $37.3 million from $133.5 million in the prior year
period. The decrease was due to the reductions in income from
discontinued operations of $94.4 million and income from continuing
operations of $1.8 million.
A more detailed discussion of Granite's consolidated financial results
for the three and six-month periods ended June 30, 2012 and 2011 is
contained in the Company's Management's Discussion and Analysis of
Results of Operations and Financial Position and the unaudited interim
consolidated financial statements and notes thereto, which are
available through the internet on Canadian Securities Administrators'
Systems for Electronic Document Analysis and Retrieval (SEDAR) and can
be accessed at www.sedar.com and on the United States Securities and Exchange Commission's
Electronic Data Gathering, Analysis and Retrieval System (EDGAR) which
can be accessed at www.sec.gov.
RECONCILIATION OF FUNDS FROM OPERATIONS TO INCOME FROM CONTINUING
OPERATIONS
�� | ||||||
�� | �� | Three months ended ������������������ June�� 30, | �� | Six months ended June 30, | ||
(in thousands, except per share information) | ���� 2012 | 2011 | �� | ���� 2012 | 2011 | |
�� | �� | �� | (previously reported in US dollars) | �� | �� | (previously reported in US dollars) |
Income from continuing operations | $�������������� 18,707 | $ �������� 26,362 | �� | $�������������� 37,270 | $ �������� 39,051 | |
Add back depreciation and amortization | ������������������ 10,667 | �������������� 10,576 | �� | ���������� ������ 21,510 | �������������� 21,023 | |
Funds from operations | $���������� �� 29,374 | $���������� 36,938 | �� | $���������� �� 58,780 | $���������� 60,074 | |
�� | �� | �� | �� | �� | �� | �� |
Basic and diluted funds from operations per share | $�������������������� 0.63 | $������������������ 0.78 | �� | $�������������������� 1.25 | $ ���������������� 1.28 | |
�� | �� | �� | �� | �� | �� | �� |
Basic number of shares outstanding | ������������������ 46,880 | ���������������� 47,128 | �� | ������������������ 46,882 | ���������������� 46,919 | |
Diluted number of shares outstanding | ������������������ 46,896 | ���������������� 47,165 | �� | ������������������ 46,902 | ���������������� 47,063 | |
�� | �� | �� | �� | �� | �� | |
DIVIDENDS
Granite's Board of Directors has declared a Cdn. dollar denominated
dividend of $0.50 per share on the Company's Common Shares for the
second quarter ended June 30, 2012.�� The dividend is payable on or
about September 13, 2012 to shareholders of record at the close of
business on August 24, 2012. The Common Shares will begin trading on an
ex-dividend basis at the opening of trading on August 22, 2012.
Unless indicated otherwise, Granite has designated the entire amount of
all past and future taxable dividends paid since January 1, 2006 to be
an "eligible dividend" for purposes of the Income Tax Act (Canada).
CONFERENCE CALL
Granite will hold a conference call on Thursday, August 9, 2012 at 8:30
a.m. Eastern time.�� The number to use for this call is 1-800-768-6483.��
Overseas callers should use +1-416-981-9026.�� Please call in at least
10 minutes prior to start time.�� The conference call will be chaired by
Tom Heslip, Chief Executive Officer.���� For anyone unable to listen to
the scheduled call, the rebroadcast numbers will be: North America -
1-800-558-5253 and Overseas - +1-416-626-4100 (enter reservation number
21600234) and will be available until Thursday, August 16, 2012.
ABOUT GRANITE
Granite is a Canadian-based real estate company engaged in the ownership
and management of predominantly industrial properties in Canada, the
United States, Mexico and Europe. The Company owns and manages
approximately 28 million square feet in 105 rental income properties.
Our tenant base currently includes operating subsidiaries of Magna
International Inc. (together "Magna") as our largest tenants, together
with tenants from other industries.
OTHER INFORMATION
Additional property statistics have been posted to our website at http://www.graniterealestate.com/uploads/File/propertystatistics.pdf.�� Copies of financial data and other publicly filed documents are
available through the internet on Canadian Securities Administrators'
Systems for Electronic Document Analysis and Retrieval (SEDAR) which
can be accessed at www.sedar.com and on the United States Securities and Exchange Commission's
Electronic Data Gathering, Analysis and Retrieval System (EDGAR) which
can be accessed at www.sec.gov.�� For further information about Granite, please see our website at www.graniterealestate.com.
FORWARD-LOOKING STATEMENTS
This press release may contain statements that, to the extent they are
not recitations of historical fact, constitute "forward-looking
statements" within the meaning of applicable securities legislation,
including the United States Securities Act of 1933 and the United
States Securities Exchange Act of 1934.�� Forward-looking statements may
include, among others, statements regarding the Company's future plans,
goals, strategies, intentions, beliefs, estimates, costs, objectives,
economic performance or expectations, or the assumptions underlying any
of the foregoing.�� In particular, this press release contains
forward-looking statements regarding a strategic plan and a proposed
conversion to a REIT. Words such as "may", "would", "could", "will",
"likely", "expect", "anticipate", "believe", "intend", "plan",
"forecast", "project", "estimate" and similar expressions are used to
identify forward-looking statements.�� Forward-looking statements should
not be read as guarantees of future events, performance or results and
will not necessarily be accurate indications of whether or the times at
or by which such future performance will be achieved.�� Undue reliance
should not be placed on such statements. In particular, Granite
cautions that the timing or completion of the strategic plan and the
timing or completion of the REIT conversion process cannot be predicted
with certainty, and there can be no assurance at this time that all
required or desirable approvals and consents to effect the plan and a
REIT conversion will be obtained in a timely manner or at all.
Forward-looking statements are based on information available at the
time and/or management's good faith assumptions and analyses made in
light of our perception of historical trends, current conditions and
expected future developments, as well as other factors we believe are
appropriate in the circumstances, and are subject to known and unknown
risks, uncertainties and other unpredictable factors, many of which are
beyond the Company's control, that could cause actual events or results
to differ materially from such forward-looking statements.�� Important
factors that could cause such differences include, but are not limited
to, the risk of changes to tax or other laws that may adversely affect
the REIT conversion; inability of Granite to implement a suitable
structure for the REIT conversion; the inability to obtain all required
consents and approvals for the REIT conversion; and the risks set forth
in the "Risks Factors" section in the Company's Annual Information Form
for 2011, filed on SEDAR at www.sedar.com and attached as Exhibit 1 to the Company's Annual Report on Form 40-F
for the year ended December 31, 2011, which investors are strongly
advised to review. The "Risks Factors" section also contains
information about the material factors or assumptions underlying such
forward-looking statements.�� Forward-looking statements speak only as of the date the statements were
made and unless otherwise required by applicable securities laws, the
Company expressly disclaims any intention and undertakes no obligation
to update or revise any forward-looking statements contained in this
press release to reflect subsequent information, events or
circumstances or otherwise.
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SOURCE: Granite Real Estate Inc.
For further information:
Please contact Tom Heslip, Chief Executive Officer, at 647-925-7539 or Michael Forsayeth, Chief Financial Officer, at 647-925-7600.
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