Northern Property reports Q1 2010 financial results
CALGARY, May 11 /CNW/ - Northern Property REIT (NPR.UN - TSX) announced its financial results for the 3 months ended March 31, 2010.
HIGHLIGHTS:
- Apartment occupancy strong in the North and Newfoundland
- Occupancy continues to improve in Alberta; BC solid
- FFO of $0.50 per unit, down from $0.54 for same quarter of 2009
- Same door NOI declines 2.9% compared to same period of 2009
- Payout ratio remains positive at 73.4% of FFO
FINANCIAL PERFORMANCE AT A GLANCE:
-------------------------------------------------------------------------
Three Months Three Months
Ended Ended
In $000's except per unit amounts March 31 March 31
-------------------------------------------------------------------------
2010 2009
Total revenue 33,963 34,039
Net operating income ("NOI") 20,831 21,304
Net earnings 3,388 7,101
Net earnings per unit, basic $0.135 $0.283
Distribution to unitholders 9,301 9,266
Distributions per unit $0.370 $0.370
Distributable Income ("DI") 12,515 13,321
DI per unit, basic $0.498 $0.532
Payout ratio 74.3% 69.6%
Funds from operation ("FFO") 12,664 13,514
FFO per unit, basic $0.504 $0.539
FFO payout ratio 73.4% 68.6%
-------------------------------------------------------------------------
-------------------------------------------------------------------------
"Northern Property is pleased that business conditions continued to improve during Q1. Four of our five regions are enjoying strong apartment rental performance. We are now beginning to see some steady improvement in northern Alberta as oil patch activity picks up," said Jim Britton, NPR's President and CEO.
Multi-family rental market conditions for NPR began to recover in the fourth quarter of 2009 and continued through the first quarter of 2010. NPR's overall apartment vacancy declined to 7.3% for the quarter, down from 8.7% for the final quarter of 2009. However, vacancy is still above the 6.1% experienced by the REIT in Q1 of 2009. Seniors' property leases remained in good standing and commercial property occupancy remained consistent with prior years.
The REIT continued to operate in a fiscally conservative fashion during Q1 2010, maintaining a pay-out ratio of 73.4% of funds from operations. This payout ratio was achieved notwithstanding Q1 being NPR's winter heating season. Moreover, higher than normal maintenance costs weighed down earnings as the REIT carried out deferred maintenance on buildings in Fort McMurray and Lloydminster.
Weighted average interest rates decreased slightly to 4.86%. Interest coverage was 2.82 times EBIDTA for the quarter.
NPR resumed its acquisition program in Q1, acquiring a total of 180 apartment units in Yellowknife and St. Paul in transactions which closed in April.
"Apartment acquisition activity is particularly difficult at the moment", Jim Britton said. "Vendors are unmotivated to sell and we are reluctant to conclude deals which are not accretive. Until the stalemate ends, we plan to focus on acquisitions when possible, some development possibilities on land we control in existing markets and on maximizing the performance of the portfolio we already possess".
"Financial results tend to lag behind operational performance," Mr. Britton went on to say. "We expect that the significant improvement in vacancy that we have been experiencing since September will become more evident in our financial results as the year goes on."
NPR expects to incur significant one-time costs during the remainder of the year associated with the requirement to implement international accounting standards and a re-organization in consequence of the SIFT legislation. Professional fees associated with International Fiancial Reporting Standards (IFRS) are expected to cost approximately $500,000. The re-organization forced by the Government of Canada's SIFT legislation in order to preserve the integrity of a REIT's status is expected to cost all REITs a considerable amount of money by the end of calendar 2010; in NPR's case this amount is expected to be approximately $2,000,000.
NORTHERN PROPERTY REAL ESTATE INVESTMENT TRUST
Unaudited Consolidated Balance Sheets
(Thousands of dollars)
-------------------------------------------------------------------------
March 31, December 31,
2010 2009
-------------------------------------------------------------------------
ASSETS
Rental properties and other capital assets
(Note 4) 835,250 836,251
Capital improvements in progress 8,576 7,046
Capital assets under development 20,541 20,423
Prepaid expenses and other assets (Note 5) 10,176 5,088
Accounts receivable (Note 17) 4,443 4,158
Tenant security deposits 3,713 3,555
Deferred rent receivable 4,857 4,539
Loans receivable 2,385 2,456
Intangible assets (Note 6) 4,531 4,851
-------------------------------------------------------------------------
894,472 888,367
-------------------------------------------------------------------------
-------------------------------------------------------------------------
LIABILITIES
Mortgages payable (Note 7) 506,530 498,996
Operating facilities (Note 8) 36,498 33,698
Bank indebtedness 718 1,820
Accounts payable and accrued liabilities (Note 17) 16,677 15,555
Distributions payable 3,102 3,096
Future income tax liability (Note 11) 44,975 43,751
Intangible liabilities (Note 6) 74 94
Non-controlling interest 471 464
-------------------------------------------------------------------------
609,045 597,474
-------------------------------------------------------------------------
UNITHOLDERS' EQUITY 285,427 290,893
-------------------------------------------------------------------------
894,472 888,367
-------------------------------------------------------------------------
-------------------------------------------------------------------------
See accompanying notes to the consolidated financial statements.
Guarantees, commitments and contingencies (Note 14)
APPROVED BY THE BOARD
Trustee
Trustee
NORTHERN PROPERTY REAL ESTATE INVESTMENT TRUST
Unaudited Consolidated Statements of Earnings and Comprehensive Earnings
Three Months Ended March 31
(Thousands of dollars, except per unit amounts)
-------------------------------------------------------------------------
2010 2009
-------------------------------------------------------------------------
REVENUE
Rental revenue 33,021 32,992
Other property income 942 1,047
-------------------------------------------------------------------------
33,963 34,039
Operating expenses (13,132) (12,735)
-------------------------------------------------------------------------
20,831 21,304
-------------------------------------------------------------------------
OTHER EXPENSES
Interest on mortgages (6,586) (6,556)
Amortization (7,738) (7,114)
-------------------------------------------------------------------------
(14,324) (13,670)
-------------------------------------------------------------------------
EARNINGS BEFORE THE UNDERNOTED 6,507 7,634
-------------------------------------------------------------------------
Trust administration (1,616) (1,395)
Interest on operating facilities (235) (149)
Interest and other income 68 109
Non-controlling interest (26) (9)
-------------------------------------------------------------------------
(1,809) (1,444)
-------------------------------------------------------------------------
EARNINGS BEFORE INCOME TAXES 4,698 6,190
-------------------------------------------------------------------------
INCOME TAXES (Note 11)
Current (86) (104)
Future (expense) recovery (1,224) 1,015
-------------------------------------------------------------------------
(1,310) 911
-------------------------------------------------------------------------
NET EARNINGS 3,388 7,101
Other comprehensive loss - (143)
-------------------------------------------------------------------------
COMPREHENSIVE EARNINGS 3,388 6,958
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Net earnings per unit (Note 13)
Basic $0.135 $0.283
Diluted $0.134 $0.283
-------------------------------------------------------------------------
-------------------------------------------------------------------------
See accompanying notes to the consolidated financial statements.
NORTHERN PROPERTY REAL ESTATE INVESTMENT TRUST
Unaudited Consolidated Statements of Unitholders' Equity
Three Months Ended March 31
(Thousands of dollars)
-------------------------------------------------------------------------
2010 2009
-------------------------------------------------------------------------
TRUST UNITS (Note 12)
Balance, January 1 368,690 367,446
Issuance of units 333 65
Exercise of unit options 24 -
Issue costs - (2)
Long term incentive plan units issued 667 666
-------------------------------------------------------------------------
Balance, March 31 369,714 368,175
-------------------------------------------------------------------------
CONTRIBUTED SURPLUS
Balance, January 1 2,109 1,676
Unit-based compensation 114 164
Exercise of unit options (24) -
Long term incentive plan units issued (667) (666)
-------------------------------------------------------------------------
Balance, March 31 1,532 1,174
-------------------------------------------------------------------------
CUMULATIVE DEFICIT
CUMULATIVE NET EARNINGS
Balance, January 1 107,385 86,056
Net earnings 3,388 7,101
-------------------------------------------------------------------------
Balance, March 31 110,773 93,157
-------------------------------------------------------------------------
CUMULATIVE DISTRIBUTIONS TO UNITHOLDERS
Balance, January 1 (187,291) (150,191)
Distributions declared to unitholders (9,301) (9,266)
-------------------------------------------------------------------------
Balance, March 31 (196,592) (159,457)
-------------------------------------------------------------------------
CUMULATIVE DEFICIT, March 31 (85,819) (66,300)
-------------------------------------------------------------------------
ACCUMULATED OTHER COMPREHENSIVE EARNINGS (LOSS)
Balance, January 1 - 123
Other comprehensive loss - (143)
-------------------------------------------------------------------------
Balance, March 31 - (20)
-------------------------------------------------------------------------
TOTAL UNITHOLDERS' EQUITY 285,427 303,029
-------------------------------------------------------------------------
-------------------------------------------------------------------------
See accompanying notes to the consolidated financial statements.
NORTHERN PROPERTY REAL ESTATE INVESTMENT TRUST
Unaudited Consolidated Statements of Cash Flows
Three Months Ended March 31
(Thousands of dollars)
-------------------------------------------------------------------------
2010 2009
-------------------------------------------------------------------------
CASH FLOWS RELATED TO THE FOLLOWING ACTIVITIES:
OPERATING
Net earnings 3,388 7,101
Adjustments for:
Deferred rental revenue (318) (304)
Amortization 7,738 7,114
Amortization of fair value of debt 183 160
Amortization of above and below market leases (14) (49)
Amortization of deferred financing fees 202 179
Non-controlling interest 26 9
Unit-based compensation 314 314
Future income tax expense (recovery) 1,224 (1,015)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
12,743 13,509
Changes in non-cash working capital (5,555) 603
-------------------------------------------------------------------------
7,188 14,112
-------------------------------------------------------------------------
-------------------------------------------------------------------------
FINANCING
Proceeds from mortgages 19,527 8,001
Repayment of mortgages (11,824) (8,179)
Proceeds from operating facilities, net 2,800 8,100
Payments to non-controlling interest (19) (20)
Units issued under Option Plan 333 -
Unit issue costs - (2)
Distributions paid to unitholders (9,294) (9,266)
-------------------------------------------------------------------------
1,523 (1,366)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
INVESTING
Acquisition of rental properties and other assets (1,367) (6,338)
Capital assets under development (99) (6,073)
Building capital maintenance (4,266) (1,389)
Capital improvements (1,877) (2,003)
-------------------------------------------------------------------------
(7,609) (15,803)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
NET (DECREASE) INCREASE IN CASH 1,102 (3,057)
CASH (BANK INDEBTEDNESS), BEGINNING OF PERIOD (1,820) 731
-------------------------------------------------------------------------
BANK INDEBTEDNESS END OF PERIOD (718) (2,326)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
SUPPLEMENTARY INFORMATION
Interest paid 6,385 6,357
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Interest received 40 88
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Income taxes paid 98 146
-------------------------------------------------------------------------
-------------------------------------------------------------------------
See accompanying notes to the consolidated financial statements.
1. DESCRIPTION OF THE TRUST
Northern Property Real Estate Investment Trust ("NPR" or the "REIT") is
an unincorporated open-ended real estate investment trust that invests in
and owns a portfolio of residential and commercial income producing
properties.
2. SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
These unaudited interim consolidated financial statements of NPR have
been prepared in accordance with the recommendations of the Handbook of
the Canadian Institute of Chartered Accountants ("CICA") that are
consistent with those used in the audited consolidated financial
statements as at and for the year ended December 31, 2009, except as
disclosed in Note 3. These unaudited interim consolidated financial
statements do not include all of the disclosures required by Canadian
generally accepted accounting principles ("Canadian GAAP") applicable to
annual financial statements; therefore, they should be read in
conjunction with the December 31, 2009 audited consolidated financial
statements.
The consolidated financial statements include the accounts of NPR and its
wholly-owned subsidiaries, together with the proportionate share of the
assets, liabilities, revenues and expenses of joint ventures.
The preparation of financial statements in accordance with Canadian GAAP
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities, and to make disclosure of
contingent assets and liabilities at the date of the financial
statements, and to make estimates and assumptions that affect the
reported amounts of revenues and expenses during the reported period.
Actual results may differ from those estimates.
3. RECENT ACCOUNTING PRONOUNCEMENTS
Recent Accounting Pronouncements
On January 5, 2009, the AcSB released Handbook Section 1582 Business
Combinations, Section 1601, Consolidated Financial Statements and Section
1602 Non-Controlling Interest which supersedes Section 1581, Business
Combinations and Section 1600, Consolidated Financial Statements. The
released sections apply to interim and annual consolidated financial
statements relating to fiscal years beginning on or after January 1,
2011, and prospectively to business combinations for which the
acquisition date is on or after the beginning of the first annual
reporting period beginning on or after January 1, 2011. The Sections are
consistent with International Financial Reporting Standards ("IFRS").
Early application and adoption are permitted.
On February 13, 2008 the Accounting Standards Board ("AcSB") confirmed
that the transition date to IFRS from Canadian GAAP would be January 1,
2011 for all publicly accountable enterprises. In April 2008, the AcSB
issued an exposure draft proposing to incorporate IFRS into the CICA
Handbook as a replacement for current Canadian GAAP for most publicly
accountable enterprises including NPR. NPR will adopt IFRS as the basis
for preparing its consolidated financial statements and will provide
comparative financial information for the previous fiscal year using IFRS
beginning with the quarter ending March 31, 2011.
4. RENTAL PROPERTIES AND OTHER CAPITAL ASSETS
-------------------------------------------------------------------------
March 31, 2010 December 31, 2009
Accumulated Net Accumulated Net
Amortiz- Book Amortiz- Book
Cost ation Value Cost ation Value
-------------------------------------------------------------------------
Land 90,906 - 90,906 90,906 - 90,906
Buildings 816,265 104,524 711,741 815,985 98,983 717,002
Furniture, fixtures
and equipment 11,059 5,253 5,806 10,326 4,956 5,370
Vehicles 1,350 724 626 1,307 674 633
Capital and
leasehold
improvements 41,856 15,685 26,171 36,491 14,151 22,340
-------------------------------------------------------------------------
961,436 126,186 835,250 955,015 118,764 836,251
-------------------------------------------------------------------------
-------------------------------------------------------------------------
NPR acquired a site for future development in the three months ended
March 31, 2010 for a total purchase price of $217,000 (2009 -
$7.4 million). Acquisitions and development projects were financed as
follows:
-------------------------------------------------------------------------
Three Months Three Months
Ended Ended
March 31 March 31
-------------------------------------------------------------------------
2010 2009
-------------------------------------------------------------------------
Cash paid 217 5,550
Mortgages payable - 1,788
Class B LP Units issued - 65
-------------------------------------------------------------------------
Total 217 7,403
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Residential rental units - 40
Seniors' units - 52
-------------------------------------------------------------------------
Units acquired - 92
-------------------------------------------------------------------------
-------------------------------------------------------------------------
5. PREPAID EXPENSES AND OTHER ASSETS
-------------------------------------------------------------------------
March 31, December 31,
2010 2009
-------------------------------------------------------------------------
Refundable deposits 5,165 -
Prepaid expenses 2,499 2,543
Prepaid equity leases 1,974 1,997
Other 538 548
-------------------------------------------------------------------------
10,176 5,088
-------------------------------------------------------------------------
-------------------------------------------------------------------------
6. INTANGIBLE ASSETS AND LIABILITIES
-------------------------------------------------------------------------
March 31, 2010 December 31, 2009
Accumulated Net Accumulated Net
Amortiz- Book Amortiz- Book
Cost ation Value Cost ation Value
-------------------------------------------------------------------------
Above-market leases 173 144 29 173 139 34
In-place leases 6,474 2,719 3,755 6,474 2,466 4,008
Lease origination
costs 1,643 896 747 1,643 834 809
-------------------------------------------------------------------------
8,290 3,759 4,531 8,290 3,439 4,851
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Below-market leases 1,220 1,146 74 1,220 1,126 94
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Intangible assets are comprised of the value of above-market leases,
in-place leases and lease origination costs for rental property
acquisitions completed. Intangible liabilities are comprised of the value
of below-market leases for rental property acquisitions completed.
7. MORTGAGES PAYABLE
-------------------------------------------------------------------------
March 31, December 31,
2010 2009
-------------------------------------------------------------------------
Mortgages payable 526,616 518,912
Fair value adjustment (8,035) (8,217)
Deferred financing costs (12,051) (11,699)
-------------------------------------------------------------------------
506,530 498,996
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Mortgages payable bear interest at rates ranging from 2.34% to 12.13% and
have a weighted average rate of 4.86% as at March 31, 2010 (December 31,
2009 - 4.87%). Mortgages are payable in monthly installments of blended
principal and interest of approximately $3.5 million. The mortgages
mature between 2010 and 2025 and are secured by charges against specific
properties. Land and buildings with a carrying value of $703.9 million
have been pledged to secure mortgages payable of NPR. The fair value of
mortgages payable at March 31, 2010 is approximately $544.3 million
(December 31, 2009 - $535.0 million).
Minimum required future principal repayments, including maturities, are
as follows:
-------------------------------------------------------------------------
-------------------------------------------------------------------------
2010 34,804
2011 45,343
2012 50,765
2013 91,572
2014 78,693
Subsequent 225,439
-------------------------------------------------------------------------
526,616
-------------------------------------------------------------------------
-------------------------------------------------------------------------
8. OPERATING FACILITIES
NPR has two revolving credit facilities totaling $57.5 million
(December 31, 2009 - $57.5 million) for acquisition and operating
purposes. The $50.0 million facility bears interest at prime plus 1.50%
or bankers' acceptance plus 3.00% with a maturity date of May 21, 2010.
NPR has extended the maturity date of this facility to July 31, 2010 to
allow for the lenders to complete underwriting due diligence on the
rental properties securing the facility. The $7.5 million facility bears
interest at prime plus 1.50% or bankers' acceptance plus 3.00% with a
maturity date of July 31, 2010. Specific properties with a carrying value
of $92.1 million have been pledged as collateral security for the
operating facilities. At March 31, 2010 NPR had utilized $36.5 million
(December 31, 2009 - $33.7 million) of the operating facilities.
9. LONG-TERM INCENTIVE PLAN AND UNIT OPTION PLAN
NPR has a Long-Term Incentive Plan ("LTIP") for the executives of NPR,
based on the results of each fiscal year. Units granted and issued under
the LTIP are as follows:
-------------------------------------------------------------------------
Number
of Units
-------------------------------------------------------------------------
Balance - December 31, 2009 48,473
Units vested and issued - January, 2010 (31,650)
Units vested and issued - February, 2010 (662)
-------------------------------------------------------------------------
Balance - March 31, 2010 16,161
-------------------------------------------------------------------------
-------------------------------------------------------------------------
The total amount of LTIP awards are determined at the end of each fiscal
year by the Board of Trustees based on an assessment of the performance
of NPR and the individual performance of the executives. The number of
units issued is based on the trading price on December 31 of each year.
Pursuant to the policy, rights to units generally vest in 1/3 tranches:
immediately upon award, then 12 and 24 months following. As at March 31,
2010, a total of 224,448 LTIP units had vested and been issued
(December 31, 2009 - 192,136).
NPR has a Unit Option Plan (the "Option Plan"), which is subject to the
rules of the Toronto Stock Exchange ("TSX"). In accordance with the
Option Plan, NPR may grant options to acquire units up to a total of
1,830,429 units. All options to acquire units expire after 5 years and
vest as determined by the Governance and Compensation Committee of NPR.
The exercise price is determined using the weighted average trading price
of the units on the five days prior to the options being granted.
The following table summarized the outstanding unit options as at
March 31, 2010:
-------------------------------------------------------------------------
Weighted-
Number Average Weighted- Number Weighted-
Outstanding Remaining Average Exercisable Average
Exercise at March 31, Contractual Exercise at March 31, Exercise
Price 2010 Life In Years Price 2010 Price
-------------------------------------------------------------------------
$23.12 726,000 3.1 $23.12 480,999 $23.12
$15.05 116,664 4.0 $15.05 64,167 $15.05
-------------------------------------------------------------------------
842,664 3.5 $22.00 545,166 $22.17
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Compensation expense for the three months ended March 31, 2010 relating
to options granted was $114,000 (2009 - $164,000). During the first
quarter of 2010, 9,000 options with an exercise price of $23.12 and
8,333 options with an exercise price of $15.05 were exercised.
10. EMPLOYEE UNIT PURCHASE PLAN
Under the terms of the Employee Unit Purchase Plan (the "EUPP"),
employees may invest a maximum of 5% of their salary in NPR trust units
and NPR contributes one unit for every three units acquired by an
employee. The units are purchased on the TSX at market prices. During the
three months ended March 31, 2010, employees invested a total of $30,420
(2009 - $25,400) and NPR contributed $10,140 (2009 - $8,500). During the
three months ended March 31, 2010, 1,590 units (2009 - 1,800 units) were
purchased at an average cost of $22.39 per unit (2009 - $16.32 per unit).
11. INCOME TAXES
NPR has certain corporate subsidiaries which are subject to income tax on
their respective taxable income at the applicable legislated tax rates.
On October 31, 2006, a "Distribution Tax" on publicly traded investment
trusts and publicly listed partnerships was announced by the federal
Minister of Finance. The announcement created a new tax regime for
Specified Investment Flow Throughs ("SIFTs"), which include certain
publicly listed income trusts and publicly listed partnerships. These
entities will be taxed in effect as corporations (at a rate comparable to
the general combined federal/provincial corporate income tax rate).
Certain real estate investment trusts are excluded from the SIFT
definition and therefore are not subject to the new regime.
The legislation provides for a transition period for publicly traded
entities that existed prior to November 1, 2006 and is not expected to
apply to NPR until 2011, The new tax regime, does not apply to entities
that qualify for the REIT Exemption. Where an entity does not qualify for
the REIT Exemption certain distributions will not be deductible in
computing income for tax purposes and will be subject to tax on such
distributions at a rate comparable to the general corporate income tax
rate. At March 31, 2010, NPR does not appear to qualify for the REIT
exemption.
GAAP requires NPR to recognize future income tax assets and liabilities
based on estimated temporary differences expected as at January 1, 2011.
Under the current legislation, NPR does not appear to qualify for the
REIT Exemption. The future income tax provision arises from temporary
differences between the estimated accounting and tax values of NPR's
assets and liabilities at January 1, 2011 and has been calculated using
the expected tax rates of 19.63% to 28.40% (December 31, 2009 - 19.63% to
28.40%).
The future tax liabilities arise from the temporary differences
summarized below:
-------------------------------------------------------------------------
March 31, December 31,
2010 2009
-------------------------------------------------------------------------
Future tax liabilities arising from temporary
differences between accounting and tax basis of:
Rental property assets in corporate subsidiaries 9,278 9,304
Rental properties 30,105 28,868
Deferred financing costs 1,700 1,574
Other assets 3,892 4,005
-------------------------------------------------------------------------
44,975 43,751
-------------------------------------------------------------------------
-------------------------------------------------------------------------
The provision for income taxes differs from the results which would be
obtained by applying the combined federal and provincial income tax rate
to net income before taxes. The provision for income taxes is comprised
of the following:
-------------------------------------------------------------------------
Three Months Three Months
Ended Ended
March 31 March 31
-------------------------------------------------------------------------
2010 2009
-------------------------------------------------------------------------
Current 86 104
Future expense (recovery) 1,224 (1,015)
-------------------------------------------------------------------------
1,310 (911)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
12. UNITHOLDERS' CAPITAL
Trust units
The total authorized number of trust units is unlimited. The total number
of trust units of the REIT outstanding as at March 31, 2010 is 23,129,619
(December 31, 2009 - 23,020,538) representing a net book value of
$345.6 million (December 31, 2009 - $343.3 million), net of issue costs.
Class B Exchangeable Limited Partnership Units and Special Voting Units
The Class B Units can be exchanged for trust units at any time at the
option of the holder of the Class B units. Each Class B unit has a
"Special Voting Unit" attached to it, which entitles the holder to one
vote, either in person or by proxy at the meeting of unitholders of the
trust as if he or she was a unitholder of the trust. Total number of
Class B LP Units and special voting units of Northern Property Limited
Partnership, a controlled limited partnership, outstanding as at
March 31, 2010, is 2,025,654 (December 31, 2009 - 2,085,090) representing
a net book value of $24.1 million (December 31, 2009 - $25.4 million).
Distributions to Unitholders
Pursuant to the Trust Declaration, holders of Trust units and Class B
units are entitled to receive distributions made on each distribution
date as approved by the Trustees. Distributions for the year are required
to be at least equal to the net income as determined in accordance with
the Income Tax Act.
The total number of NPR Trust units and Class B units issued, as the
result of an exchange of Class B limited partnership units of Northern
Property Limited Partnership (the "Class B LP Units"), outstanding and
eligible for distributions at March 31, 2010 is 25,155,273 (December 31,
2009 - 25,105,628), representing net proceeds of $369.7 million, net of
issue costs of $19.6 million (December 31, 2009 - $368.7 million, net of
issue costs of $19.6 million). The number of units issued and outstanding
is as follows:
-------------------------------------------------------------------------
Date Trust Issue Class B
Units Price LP Units
-------------------------------------------------------------------------
December 31, 2009 23,020,538 - 2,085,090
-------------------------------------------------------------------------
January 4, 2010 LTIP units issued 12,941 $18.88 -
January 6, 2010 LTIP units issued 18,709 $21.90 -
February 8, 2010 LTIP units issued 662 $19.16 -
March 31, 2010 Options exercised 9,000 $23.12 -
March 31, 2010 Options exercised 8,333 $15.05 -
Class B LP units
exchanged 59,436 - (59,436)
-------------------------------------------------------------------------
March 31, 2010 23,129,619 - 2,025,654
-------------------------------------------------------------------------
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Date Issue Total $(000's)
Price
-------------------------------------------------------------------------
December 31, 2009 25,105,628 368,690
-------------------------------------------------------------------------
January 4, 2010 LTIP units issued - 12,941 244
January 6, 2010 LTIP units issued - 18,709 410
February 8, 2010 LTIP units issued - 662 13
March 31, 2010 Options exercised - 9,000 222
March 31, 2010 Options exercised - 8,333 135
Class B LP units
exchanged - - -
-------------------------------------------------------------------------
March 31, 2010 - 25,155,273 369,714
-------------------------------------------------------------------------
-------------------------------------------------------------------------
13. NET EARNINGS PER UNIT
-------------------------------------------------------------------------
Three Months Three Month
Ended Ended
March 31 March 31
-------------------------------------------------------------------------
2010 2009
-------------------------------------------------------------------------
Net earnings 3,388 7,101
-------------------------------------------------------------------------
Weighted average units for basic net earnings
per unit 25,136,575 25,063,002
Dilutive effect of units to be issued under
the LTIP 17,911 30,703
Dilutive effect of Option Plan 47,439 41,855
-------------------------------------------------------------------------
Weighted average units for diluted net
earnings per unit 25,201,925 25,135,560
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Net earnings per unit:
Basic $0.135 $0.283
Diluted $0.134 $0.283
-------------------------------------------------------------------------
-------------------------------------------------------------------------
14. GUARANTEES, COMMITMENTS AND CONTINGENCIES
In the ordinary course of business, NPR may provide indemnification
commitments to counterparties in transactions such as credit facilities,
leasing transactions, service arrangements, director and officer
indemnification agreements and sales of assets. These indemnification
agreements may require NPR to compensate the counterparties for costs
incurred as a result of changes in laws and regulations (including tax
legislation) or as a result of litigation claims or statutory sanctions
that may be suffered by counterparties as a consequence of the
transaction. The terms of these indemnification agreements may vary based
on the contract and do not provide any limit on the maximum potential
liability. To date, NPR has not made any significant payments under such
indemnifications and no amount has been accrued in the financial
statements with respect to these indemnification commitments. In the
normal course of operations, NPR becomes subject to various legal and
other claims. Management and its legal counsel evaluate these claims and,
where required, accrue the best estimate of costs relating to these
claims. Management believes the outcome of claims of this nature at
March 31, 2010 will not have a material impact on NPR.
During the normal course of operations, NPR provided guarantees for
mortgages payable relating to investments in corporations and joint
ventures where NPR owns less than 100%. The mortgages payable are secured
by specific charges against the properties owned by the corporations and
joint ventures. In the event of a default of the corporation or joint
venture, NPR may be liable for 100% of the outstanding balances of these
mortgages payable. At March 31, 2010, NPR has provided guarantees
totaling $6.0 million (December 31, 2009 - $6.1 million). The mortgages
bear interest at rates ranging from 3.06% to 6.10% and mature July 2010
to December 2013 (December 2009 - 3.06% to 6.10% and mature July 2010 to
December 2013). As at March 31, 2010, land and buildings with a carrying
value of $6.2 million have been pledged to secure these mortgages payable
(December 2009 - $6.3 million).
NPR has included its proportionate share of its joint ventures' mortgages
payable totaling $4.7 million at March 31, 2010 (December 31, 2009 -
$4.9 million) in these consolidated financial statements.
In connection with the acquisition of certain seniors' properties in
Newfoundland, the tenants have agreed to expand certain properties
purchased by NPR. NPR has entered into agreements to purchase these
expansions once completed. In total, NPR has commitments totalling
$2.0 million.
15. SEGMENTED INFORMATION
The primary business segments used by management are geographic segments
(i.e. provinces and territories). NPR operates in 5 geographic segments,
British Columbia, Alberta, the Northwest Territories, Nunavut and
Newfoundland. Within its geographic business segments, NPR has two
business operating segments: residential and commercial income producing
properties. The REIT's residential properties are comprised of three
components: apartments, townhomes and single family rental units;
execusuite apartment rental units, where the rental periods range from a
few days to several months; and seniors' properties where the properties
are leased on a long term basis to qualified operators who provide
services to individual residents. The commercial business segment is
comprised of office, industrial and retail properties in areas where NPR
has residential operations. All items, except gain on sale of rental
properties and gain on settlement of debt which are related only to the
REIT and are included in the Consolidated Statement of Earnings, are not
allocated to the defined segments. As such, NPR has not provided a
reconciliation of Earnings before Other Items to Net Earnings. In 2009,
gain on sale of rental properties was earned in the residential rental
and commercial business segments in Nunavut and the Northwest
Territories, respectively. Gain on settlement of debt was earned in the
residential business segments in all geographic segments. Segmented
information for NPR is provided below:
Total Assets
-------------------------------------------------------------------------
March 31, 2010 BC Alberta NWT Nunavut Nfld Total
-------------------------------------------------------------------------
Residential
Multi-family 93,264 180,679 86,781 112,109 58,629 531,462
Execusuites - - 10,370 9,387 9,612 29,369
Seniors' 16,177 120,988 - - 49,389 186,554
-------------------------------------------------------------------------
109,441 301,667 97,151 121,496 117,630 747,385
Commercial 21,060 9,057 91,919 19,401 1,182 142,619
Trust - 4,468 - - - 4,468
-------------------------------------------------------------------------
TOTAL ASSETS 130,501 315,192 189,070 140,897 118,812 894,472
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Total Assets
-------------------------------------------------------------------------
December 31, 2009 BC Alberta NWT Nunavut Nfld Total
-------------------------------------------------------------------------
Residential
Multi-family 92,488 176,982 85,046 113,105 58,392 526,013
Execusuites - - 10,470 9,537 9,428 29,435
Seniors' 16,230 121,691 - - 49,610 187,531
-------------------------------------------------------------------------
108,718 298,673 95,516 122,642 117,430 742,979
Commercial 21,289 9,083 90,388 19,660 1,192 141,612
Trust - 3,776 - - - 3,776
-------------------------------------------------------------------------
TOTAL ASSETS 130,007 311,532 185,904 142,302 118,622 888,367
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Geographic Segments
-------------------------------------------------------------------------
Three months ended
March 31, 2010 BC Alberta NWT Nunavut Nfld Total
-------------------------------------------------------------------------
Rental revenue 4,210 8,156 9,626 6,314 4,715 33,021
Other income 117 182 377 122 144 942
Operating expense (1,859) (2,968) (4,566) (1,999) (1,740) (13,132)
-------------------------------------------------------------------------
2,468 5,370 5,437 4,437 3,119 20,831
Interest on mortgages (803) (2,688) (1,421) (960) (714) (6,586)
Amortization (1,142) (2,028) (2,099) (1,511) (958) (7,738)
-------------------------------------------------------------------------
EARNINGS BEFORE
OTHER ITEMS 523 654 1,917 1,966 1,447 6,507
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Geographic Segments
-------------------------------------------------------------------------
Three months ended
March 31, 2009 BC Alberta NWT Nunavut Nfld Total
-------------------------------------------------------------------------
Rental revenue 4,052 9,085 9,018 6,648 4,189 32,992
Other income 115 255 328 228 121 1,047
Operating expense (1,602) (2,467) (4,524) (2,447) (1,695) (12,735)
-------------------------------------------------------------------------
2,565 6,873 4,822 4,429 2,615 21,304
Interest on mortgages (728) (2,686) (1,359) (1,017) (766) (6,556)
Amortization (965) (1,906) (1,947) (1,438) (858) (7,114)
-------------------------------------------------------------------------
EARNINGS BEFORE
OTHER ITEMS 872 2,281 1,516 1,974 991 7,634
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Business Segments
-------------------------------------------------------------------------
Total
Three months ended Multi- Execu- Residen- Commer-
March 31, 2010 family suites Seniors' tial cial Total
-------------------------------------------------------------------------
Rental revenue 20,507 1,964 4,439 26,910 6,111 33,021
Other income 718 31 - 749 193 942
Operating expenses (9,595) (1,126) (6) (10,727) (2,405) (13,132)
-------------------------------------------------------------------------
11,630 869 4,433 16,932 3,899 20,831
Interest on
mortgages (4,138) (285) (1,514) (5,937) (649) (6,586)
Amortization (4,923) (352) (1,140) (6,415) (1,323) (7,738)
-------------------------------------------------------------------------
EARNINGS BEFORE
OTHER ITEMS 2,569 232 1,779 4,580 1,927 6,507
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Business Segments
-------------------------------------------------------------------------
Total
Three months ended Multi- Execu- Residen- Commer-
March 31, 2009 family suites Seniors' tial cial Total
-------------------------------------------------------------------------
Rental Revenue 21,253 1,788 4,292 27,333 5,659 32,992
Other Income 864 113 - 977 70 1,047
Operating Expenses (9,233) (1,089) (6) (10,328) (2,407) (12,735)
-------------------------------------------------------------------------
12,884 812 4,286 17,982 3,322 21,304
Interest on
Mortgages (4,044) (265) (1,560) (5,869) (687) (6,556)
Amortization (4,453) (287) (1,096) (5,836) (1,278) (7,114)
-------------------------------------------------------------------------
EARNINGS BEFORE
OTHER ITEMS 4,387 260 1,630 6,277 1,357 7,634
-------------------------------------------------------------------------
-------------------------------------------------------------------------
16. RELATED PARTY TRANSACTIONS
Related party transactions are conducted in the normal course of
operations and are measured at the exchange amount, which is the amount
of consideration established and agreed upon by the related parties. A
Trustee of NPR is the Chairman of AgeCare Investment Ltd. ("AgeCare"),
which leases six seniors' properties. For the three months ended
March 31, 2010, NPR earned rental income, including rental revenue earned
on a straight-line basis over the term of the lease, totaling
$3.2 million (2009 - $3.2 million) from AgeCare. Amounts outstanding in
accounts receivable pertaining to this lease were $nil at March 31, 2010
(December 31, 2009 - $nil). In addition, AgeCare is paid an annual fee
for advisory services provided to NPR respecting prospective acquisitions
of seniors' properties. For the three months ended March 31, 2010, NPR
paid $30,000 for these services (2009 - $30,000).
During the first quarter of 2009, NPR completed renovations totaling
$2.15 million to a seniors' facility in BC which is leased to AgeCare. At
December 31, 2009, in accordance with the lease agreement, AgeCare is
repaying this amount over 15 years. Interest revenue of $30,000 was
earned for the three months ended March 31, 2010 (2009 - $15,000)
relating to this receivable. Amounts outstanding at March 31, 2010 was
$2.0 million (December 31, 2009 - $2.1 million).
A company owned by a Trustee of NPR leases commercial space from NPR
under normal commercial terms. NPR earned rental revenue from that
arrangement of $125,000 for the three months ended March 31, 2010
(2009 - $113,500). Amounts outstanding in accounts receivable pertaining
to this lease were $nil at March 31, 2010 (December 31, 2009 - $nil).
17. FINANCIAL INSTRUMENTS
NPR's accounts and loans receivable and other financial liabilities are
substantially carried at amortized cost, which approximates fair value.
Such fair value estimates are not necessarily indicative of the amounts
the Trust might pay or receive in actual market transactions.
The fair value hierarchy of financial instruments measured at fair value
on the balance sheet is as follows:
-------------------------------------------------------------------------
March 31, 2010 December 31, 2009
Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
-------------------------------------------------------------------------
Financial assets
and liabilities:
Bank indebtedness 718 - - 1,820 - -
-------------------------------------------------------------------------
-------------------------------------------------------------------------
The three levels of the fair value hierarchy are described as follows:
Level 1: Values based on unadjusted quoted prices in active markets
that are accessible at the measurement date for identical assets or
liabilities.
Level 2: Values based on quoted prices in markets that are not active
or model inputs that are observable either directly or indirectly for
substantially the full term of the asset or liability.
Level 3: Values based on prices or valuation techniques that require
inputs that are both unobservable and significant to the overall fair
value measurement.
NPR had no embedded derivatives requiring separate recognition.
Utility cost risk
NPR is exposed to utility cost risk, which results from the fluctuation
in utility prices for fuel oil, natural gas and electricity, the primary
utilities used to heat NPR's properties. The exposure to utility cost
risk is restricted primarily to the REIT's residential rental and
execusuites portfolio. The leases in the remainder of the portfolio
generally provide for recovery of operating costs, including utilities.
Because of the northern location of a portion of NPR's portfolio, the
exposure to utility price fluctuations is more pronounced in the first
and last fiscal quarter of the year. NPR manages its exposure to utility
risk through a number of preventative measures, including retrofitting
properties with energy efficient appliances, fixtures and windows. With
the exception of a fixed price utility contract in place for certain
residential rental units in Alberta, NPR does not utilize hedges or
forward contracts to manage exposure to utility cost risk.
Heating oil is the primary source of fuel for heating properties located
in Nunavut and the Northwest Territories. Over the last two years, NPR
converted heating systems for certain properties in Yellowknife from fuel
oil based boilers to wood pellet boilers. The investment in these
environmentally friendly boilers continues to reduce NPR's exposure to
volatile heating oil prices. Exposure to increases in the cost of heating
oil is partially offset by the ability to recover these increases from a
significant proportion of its commercial and some residential tenants.
Natural gas is the significant source of fuel for heating properties
located in Alberta, BC and Inuvik, NWT. NPR has fixed price contracts for
certain of its properties which accounts for approximately 18% of the
REIT's usage in Alberta. During 2009, NPR received approximately $40,000
in rebates under the Natural Gas Rebate Program which provided for
rebates to consumers when natural gas prices exceeded $5.50 per gigajoule
from October to March. The government of Alberta did not renew the
Natural Gas Rebate Program for the 2009-2010 heating season. Natural gas
prices in Inuvik and BC are not subject to regulated price control and
the REIT does not use financial instruments to manage the exposure to the
price risk.
Management prepared a sensitivity analysis on the impact of price changes
in the cost of heating oil and natural gas. A 10% change in the average
price of heating oil and natural gas would impact NPR's net earnings by
$154,000 for the three months ended March 31, 2010.
Electricity is the primary source of fuel for heating properties located
in Newfoundland as well as parts of north eastern BC. In Newfoundland,
electricity is purchased from the provincially regulated utility and is
directly paid by the tenants for a significant portion of the REIT's
multi-family rental units. As there is not a significant direct risk to
NPR regarding the price of electricity, a sensitivity analysis has not
been prepared.
Liquidity risk
Ultimate responsibility for monitoring liquidity risk management lies
with management and the Board of Trustees of the REIT. The REIT moderates
liquidity risk by managing mortgage and loan maturities to ensure a
relatively even amount of mortgage maturities in each year. At March 31,
2010 the REIT has operating facilities totaling $57.5 million
(December 31, 2009 - $57.5 million). At March 31, 2010, $36.5 million of
the operating facilities were utilized (December 31, 2009 -
$33.7 million). Cash flow projections are completed on a regular basis to
ensure there will be adequate liquidity to maintain operating and
investment activities in addition to making monthly distributions to
unitholders. The Board of Trustees reviews current financial results and
the annual business plan in determining appropriate distribution levels.
Credit risk
NPR's credit risk primarily arises from the possibility that tenants may
not be able to fulfill their lease commitments. Tenant receivables are
comprised of a large number of tenants spread across the geographic areas
in which the REIT operates. There are no significant exposures to single
tenants with the exception of AgeCare (See note 16), which leases
seniors' properties in Alberta and BC and the Governments of Canada, the
Northwest Territories and Nunavut, which lease a large number of
residential units and commercial property in the Northwest Territories
and Nunavut.
NPR mitigates this risk through conducting thorough credit checks on
prospective tenants, requiring rental payments on the first of the month,
obtaining security deposits approximating one month's rent from tenants
where legislation permits, and geographic diversification in its
portfolio. Tenants are required to pay rent on the first of each month,
with the exception of certain government leases where rent is due at the
end of the month and certain commercial tenants where operating cost
recoveries are billed in arrears. As such, the majority of tenant
receivables are past due at the balance sheet date.
The following is an aging of current tenant and other receivables:
-------------------------------------------------------------------------
March 31, December 31,
2010 2009
-------------------------------------------------------------------------
0-30 days 1,361 1,405
31-60 days 295 221
61-90 days 462 58
Over 90 days 403 730
-------------------------------------------------------------------------
Tenant receivables 2,521 2,414
Other receivables 2,272 2,094
Allowance for doubtful accounts (350) (350)
-------------------------------------------------------------------------
4,443 4,158
-------------------------------------------------------------------------
-------------------------------------------------------------------------
NPR classifies tenants as past tenants on the date of their move out from
a residential unit. NPR records a specific allowance for doubtful
accounts on all balances owed by past tenants. Any subsequent recovery of
balances owed from past tenants is recorded as a reduction in the bad
debt provision for the period. In addition, NPR records an allowance for
doubtful accounts from current tenants and other receivables where the
expected amount to be collected is less than the actual accounts
receivable. The amounts disclosed on the balance sheet are net of
allowances for uncollectible accounts from current and past tenants and
other receivables, estimated by Management based on prior experience and
current economic conditions.
The reconciliation of changes in allowance for doubtful accounts is as
follows:
-------------------------------------------------------------------------
Three Months Three Months
Ended Ended
March 31 March 31
-------------------------------------------------------------------------
2010 2009
-------------------------------------------------------------------------
Balance, beginning of period 350 350
Accounts receivable written off (12) (44)
Accounts recovered 171 84
Decrease in allowance (159) (40)
-------------------------------------------------------------------------
Balance, December 31 350 350
-------------------------------------------------------------------------
-------------------------------------------------------------------------
The following is an aging of accounts payable and accrued liabilities:
-------------------------------------------------------------------------
March 31, December 31,
2010 2009
-------------------------------------------------------------------------
0-6 months 11,731 10,629
6 months to 1 year 1,124 1,193
Over 1 year 176 212
-------------------------------------------------------------------------
13,031 12,034
Tenant security deposits 3,646 3,521
-------------------------------------------------------------------------
16,677 15,555
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Management believes that future cash flows from operations and
availability under the current operating facilities provide sufficient
available funds through the foreseeable future to support these financial
liabilities.
Interest rate risk
NPR is exposed to interest rate risk on mortgages payable and does not
hold any financial instruments to mitigate that risk. NPR utilizes both
fixed and floating rate debt. Interest rate risk related to floating
interest rates is limited primarily to the utilization of operating
facilities. Management mitigates interest rate risk by utilizing fixed
rate mortgages, ensuring access to a number of sources of funding and
staggering mortgage maturities with the objective of achieving relatively
even annual debt maturities. To the extent possible, NPR maximizes the
amount of mortgages on residential rental properties where it is possible
to lower interest rates through Canada Mortgage and Housing Corporation
mortgage insurance.
The sensitivity analysis for floating rate debt has been completed based
on the exposure to interest rates at the balance sheet date. Floating
rate debt includes all mortgage payable which are not subject to fixed
interest rates and the revolving line of credit. If interest rates
changed by 0.50% and all other variables remained constant, NPR's net
earnings for the three months ended March 31, 2010 would have changed by
$65,000.
18. CAPITAL MANAGEMENT
NPR's objective when managing its capital is to safeguard its assets
while maximizing the growth of its business, returns to unitholders and
maintaining the sustainability of cash distributions. NPR's capital
consists of mortgages payable, operating and acquisition facilities,
Trust Units and Class B LP Units.
Management monitors the REIT's capital structure on an ongoing basis to
determine the appropriate level of mortgages payable to be placed on
specific properties at the time of acquisition or when existing debt
matures. NPR follows conservative guidelines which are set out in the
Trust Declaration. In determining the most appropriate debt,
consideration is given to strength of cash flow generated from the
specific property, interest rate, amortization period, maturity of the
debt in relation to the existing debt of the REIT, interest and debt
service ratios, and limits on the amount of floating rate debt. NPR has
operating facilities which is used to fund acquisitions and capital
expenditures until specific mortgage debt is placed or additional equity
is raised.
Consistent with others in the industry, NPR monitors capital on the basis
of debt to gross book value ratio. The Declaration of Trust provides for
a maximum debt to gross book value ratio of 70%. The REIT does not
anticipate operating above a debt to gross book value ratio of 60%. NPR's
debt to gross book value is as follows:
-------------------------------------------------------------------------
Three Months
Ended Year Ended
March 31, December 31,
2010 2009
-------------------------------------------------------------------------
Bank indebtedness 718 1,820
Operating facilities 36,498 33,698
Mortgages payable 526,616 518,912
-------------------------------------------------------------------------
Debt 563,832 554,430
-------------------------------------------------------------------------
Rental properties and other capital assets 835,250 836,251
Capital assets improvements in progress 8,576 7,046
Capital assets under development 20,541 20,423
Refundable deposits and mortgage proceeds
held in trust 5,165 -
Accumulated amortization 126,186 118,764
Future income taxes on acquisitions (21,647) (21,647)
-------------------------------------------------------------------------
Gross Book Value 974,071 960,837
-------------------------------------------------------------------------
Debt to Gross Book Value 57.9% 57.7%
-------------------------------------------------------------------------
-------------------------------------------------------------------------
NPR is subject to three principal financial covenants in its mortgage
payable and operating facilities. The financial covenants are described
as follows:
- Debt Service Coverage - calculated as Net earnings before interest,
taxes and amortization divided by the debt service payments (total
interest expense and principal repayments);
- Interest Coverage - calculated as Net earnings before interest, taxes
and amortization divided by total interest expense;
- Debt to Gross Book Value as calculated above.
-------------------------------------------------------------------------
Three Months
Ended Year Ended
March 31, December 31,
2010 2009
-------------------------------------------------------------------------
Earnings from continuing operations before taxes 4,698 25,929
Amortization 7,738 28,789
Interest on mortgages 6,586 26,435
Interest on operating facilities 235 755
-------------------------------------------------------------------------
Net earnings before interest, taxes and
amortization 19,257 81,908
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Interest on mortgages 6,586 26,435
Interest on operating facilities 235 755
-------------------------------------------------------------------------
Total Interest Expense 6,821 27,190
Principal repayments 4,141 16,198
-------------------------------------------------------------------------
Debt Service Payments 10,962 43,388
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Interest Coverage 2.82 3.01
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Debt Service Coverage 1.76 1.89
-------------------------------------------------------------------------
-------------------------------------------------------------------------
As at and during the three month period ended March 31, 2010, NPR
complied with all externally imposed capital requirements and all
covenants relating to its debt facilities.
19. SUBSEQUENT EVENTS
Between April 1, 2010 and May 11, 2010 NPR completed mortgage financings
and renewals totalling $13.5 million with interest rates from 3.75% to
4.58% and terms to maturity from 1 to 10 years. Proceeds from the
mortgage financings were used to fund new acquisitions, repay existing
mortgage debt and a portion of the operating facility.
Subsequent to March 31, 2010, NPR completed the acquisition of
100 residential units in Yellowknife, NWT and 80 residential units in
St. Paul, Alberta for total consideration of approximately $13.9 million.
The acquisitions were financed through a combination mortgages payable
and the operating facilities.
For further information: Todd Cook, Chief Financial Officer, at (403) 531-0720
Share this article