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Granite Announces 2012 Fourth Quarter and Year End Results



          Granite Announces 2012 Fourth Quarter and Year End Results

PR Newswire

TORONTO, March 5, 2013

TORONTO, March 5, 2013 /PRNewswire/ - Granite Real Estate Investment Trust
(TSX: GRT.UN; NYSE: GRP.U) ("Granite") today announced its results for the
three month period and year ended December 31, 2012.

"We are pleased  with our financial  results for the  fourth quarter and  year 
ended 2012 and the consistency of the operating cash flow that our real estate
portfolio continues to demonstrate.  2012 was a  transformational year for  us 
that included our name change, new office locations, investment in new  people 
and the  conversion to  a  real estate  investment  trust.  Our  2012  results 
reflect the execution of  Granite's strategic plan  and more importantly,  the 
actions we  have  taken to  stabilize  and  position Granite  for  growth  and 
diversification," commented Tom Heslip, Chief Executive Officer.

Granite's consolidated results  for the  three month periods  and years  ended 
December 31, 2012 and 2011 are  summarized below (all figures are in  Canadian 
("Cdn.") dollars):

                                                                              
(in thousands, except       Three months ended               Year ended
per share figures)             December 31,                 December 31,
                           2012         2011           2012          2011
                                      (previously                  (previously
                                         reported                     reported
                                   in US dollars)               in US dollars)
Revenues^(1)            $ 45,315 $         46,360   $ 181,115 $        180,937
                                                                              
Income before income                               
taxes                   $ 17,088 $          4,435   $  85,782 $         53,554
Income from continuing                             
operations^(1) (3)        15,148            3,614      71,337           57,942
Income from                                        
discontinued
operations^(1)                --               --          --           94,449
Net income              $ 15,148 $          3,614   $  71,337 $        152,391
                                                                              
Diluted earnings per                               
share from:                                                                   
      - continuing                                 
      operations        $   0.32 $           0.08   $    1.52 $           1.23
      - discontinued                               
      operations              --               --          --             2.01
Diluted earnings per                               
share                   $   0.32 $           0.08   $    1.52 $           3.24
                                                                              
Funds from operations                              
("FFO")^(2)             $ 25,905 $         14,576   $ 114,131 $        100,552
Diluted FFO per share                              
^(2)                    $   0.55 $           0.31   $    2.43 $           2.14

__________________________
(1)   Following the close of business on June 30, 2011, the Racing & Gaming
      Business, substantially all of Granite'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 in consideration for
      the elimination of the previous 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 income-producing
      property portfolio.
       
(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.  Granite
      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 year ended December 31, 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.

COMPLETION OF REAL ESTATE INVESTMENT TRUST CONVERSION

Effective January 3, 2013, Granite  completed its conversion from a  corporate 
structure to a stapled unit Real Estate Investment Trust ("REIT")  structure.  
The conversion to a REIT was implemented pursuant to a court approved plan  of 
arrangement under the Business  Corporations Act (Quebec).  Under the plan  of 
arrangement, all of the common shares were exchanged, on a one-for-one  basis, 
for stapled units, each of which consists  of one unit of Granite Real  Estate 
Investment Trust  and  one common  share  of  Granite REIT  Inc.  The  assets, 
liabilities and  operations of  the new  combined stapled  unit structure  are 
comprised of all the  previous assets, liabilities  and operations of  Granite 
Real Estate Inc.

CHANGES IN FINANCIAL REPORTING

Effective January 1, 2012, Granite's  reporting currency was changed from  the 
U.S.  dollar  to  the  Cdn.  dollar.  All  comparative  financial  information 
contained in  this press  release and  in the  audited consolidated  financial 
statements and  related Management's  Discussion and  Analysis for  the  three 
month period and year ended December 31,  2012 has been recast to reflect  the 
financial results as if the information had been historically reported in Cdn.
dollars.

Granite reported its fourth  quarter and year end  results in accordance  with 
U.S. generally accepted accounting  principles ("U.S. GAAP") however,  Granite 
will adopt International Financial Reporting  Standards in place of U.S.  GAAP 
effective for its  interim and  annual periods commencing  after December  31, 
2012.

GRANITE'S CONSOLIDATED FINANCIAL RESULTS

Three Month Period Ended December 31, 2012

For the three month period ended  December 31, 2012, rental revenue  decreased 
by $1.1 million  from $46.4 million  in the  fourth quarter of  2011 to  $45.3 
million in  the fourth  quarter  of 2012  primarily  due to  the  unfavourable 
effects of  changes in  foreign currency  exchange rates  partially offset  by 
completed projects  coming  on-stream  and the  additional  rent  earned  from 
contractual rent increases.

Income from continuing  operations and  net income  was $15.1  million in  the 
fourth quarter of 2012 and includes $5.7 million of costs associated with  the 
REIT conversion.  Income from  continuing operations and  net income was  $3.6 
million in the prior year period. The increase of $11.5 million was  primarily 
due to (i) a decrease in the write-down of long-lived assets of $16.7  million 
and (ii)  strategic review  advisory costs  and termination  expenses of  $4.1 
million incurred in the fourth quarter of 2011 partially offset by (i)  higher 
REIT advisory costs of $3.7 million,  (ii) higher property operating costs  of 
$1.8 million, (iii) lower rental revenue  of $1.1 million, (iv) a decrease  in 
net foreign exchange gains of $0.9  million and (v) higher income tax  expense 
of $1.2 million.

FFO for the fourth quarter of 2012 increased $11.3 million from $14.6  million 
in the prior year period to $25.9 million in the current period.  The increase
was primarily due  to the  $11.5 million  increase in  income from  continuing 
operations partially offset by decreased depreciation expense of $0.2 million.

Year Ended December 31, 2012

Continuing Operations

For the year ended December 31, 2012, rental revenue increased by $0.2 million
from $180.9  million  in 2011  to  $181.1 million  in  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.

Income from continuing operations was $71.3 million in the year ended December
31, 2012  and  includes  $10.9  million of  costs  associated  with  the  REIT 
conversion. Income from continuing operations  was $57.9 million in the  prior 
year period and includes a recovery  of $12.9 million in income tax  resulting 
from an  internal  amalgamation  undertaken  in  2010  that  was  subsequently 
cancelled.  Excluding the $12.9  million recovery of  income tax, income  from 
continuing operations  increased  by $26.3  million  primarily due  to  (i)  a 
decrease in the  write-down of  long-lived assets  of $19.5  million and  (ii) 
lower general and administrative expenses of $15.8 million (primarily  related 
to  reduced  advisory  costs,   decreased  insurance  expense  and   decreased 
compensation expense). Partially  offsetting these increases  were (i)  higher 
income tax expense of  $5.9 million, excluding the  income tax recovery  noted 
above, (ii) increased property operating  costs of $2.6 million, (iii)  higher 
net interest expense  of $0.2  million and  (iv) higher  net foreign  exchange 
losses of $0.3 million.

FFO for the year ended December  31, 2012 increased $13.5 million from  $100.6 
million in the prior year period to $114.1 million primarily due to the  $13.4 
million increase in income from continuing operations.

Discontinued Operations

Income from discontinued operations  for the year ended  December 31, 2011  of 
$94.4 million was primarily comprised of the  net gain on the disposal of  the 
Arrangement Transferred Assets & Business of $87.4 million.

Net Income

Net income for the year ended December 31, 2012 decreased by $81.1 million  to 
$71.3 million from $152.4 million in  the prior year period. The decrease  was 
due to the reduction in income  from discontinued operations of $94.4  million 
partially offset by an increase in income from continuing operations of  $13.4 
million.

A more detailed discussion of Granite's consolidated financial results for the
three month periods and years ended December 31, 2012 and 2011 is contained in
Granite's Management's Discussion  and Analysis of  Results of Operations  and 
Financial Position and the audited 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  (the "SEC")  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               Year ended
                              December  31,                December 31,
(in thousands,                                                
except per share
information)              2012         2011           2012          2011
                                     (previously                  (previously
                                        reported                     reported
                                  in US dollars)               in US dollars)
Income from            $        $                  $         $
continuing
operations               15,148            3,614      71,337           57,942
Add back                                                      
depreciation and
amortization             10,757           10,962      42,773           42,701
Add back (deduct)                                             
loss (gain) on
disposal of real
estate                       --               --          21             (91)
Funds from             $        $                  $         $
operations               25,905           14,576     114,131          100,552
                                                                             
Basic funds from       $        $                  $         $
operations per
share                      0.55             0.31        2.44             2.14
Diluted funds from     $        $                  $         $
operations per
share                      0.55             0.31        2.43             2.14
                                                                             
Basic number of                                               
shares outstanding       46,833           46,871      46,855           46,888
Diluted number of                                             
shares outstanding       46,866           46,883      46,876           46,970

CONFERENCE CALL

Granite will hold a conference call on  Wednesday, March 6, 2013 at 8:30  a.m. 
Eastern time.  The number  to use for this  call is 1-800-734-8583.   Overseas 
callers should use +1-416-981-9010.  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  21648379)  and will  be  available 
until Wednesday, March 13, 2013.

ABOUT GRANITE

Granite is a Canadian-based  REIT engaged in the  ownership and management  of 
predominantly industrial properties in North America and Europe. Granite  owns 
approximately 29  million square  feet in  106 rental  income properties.  Our 
tenant base  currently includes  Magna International  Inc. and  its  operating 
subsidiaries  as  our  largest  tenants,  together  with  tenants  from  other 
industries.

OTHER INFORMATION

Additional  property  statistics   have  been   posted  to   our  website   at 
http://www.granitereit.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.

Granite has filed its annual  report for the year  ended December 31, 2012  on 
Form 40-F  with the  SEC.   The Form  40-F,  including the  audited  financial 
statements, included therein, is available at http://www.granitereit.com. Hard
copies of the  audited financial statements  are available free  of charge  on 
request by calling 647.925.7500 or writing to:

Investor Inquiries
77 King Street West, Suite 4010, P.O. Box 159
Toronto-Dominion Centre
Toronto, Ontario
M5K 1H1

For further information about Granite, please see our website at
www.granitereit.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, as amended  and the United States Securities  Exchange 
Act of  1934,  as  amended.  Forward-looking  statements  may  include,  among 
others,  statements  regarding  Granite's  future  plans,  goals,  strategies, 
intentions, beliefs, estimates, costs, objectives, capital structure, cost  of 
capital, tenant base, tax consequences, economic performance or  expectations, 
or the assumptions underlying any of the foregoing.  In particular, this press
release contains forward-looking statements  regarding the Company's  adoption 
of IFRS.  Words such as  "may", "would", "could", "will", "likely",  "expect", 
"anticipate", "believe", "intend", "plan", "forecast", "project",  "estimate", 
"seek"  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  there  can  be  no  assurance  that  the 
anticipated  reduction  in  cash  income  taxes  payable  following  the  REIT 
conversion will  be  realized  or  that the  application  of  IFRS  accounting 
policies expected to be adopted may not be adopted and the application of such
policies to  certain  transactions  or circumstances  can  be  different  than 
expected, 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 
Granite'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; the ability to  realize 
the anticipated  reduction in  cash income  taxes payable  following the  REIT 
conversion and the risks set forth in the "Risk Factors" section in  Granite's 
Annual Information Form for 2012, 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,  2012,  filed with  the  SEC and  available  online on  EDGAR  at 
www.sec.gov, all of which investors are strongly advised to review. The  "Risk 
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, Granite 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.

 

SOURCE Granite Real Estate Investment Trust

Contact:

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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