Crombie REIT reports fourth quarter and fiscal 2013 results

 Crombie REIT (TSX:CRR.UN)  STELLARTON, NS, Feb. 26, 2014 /CNW/ - Crombie Real Estate Investment Trust  ("Crombie") (TSX: CRR.UN) is pleased to report its financial results for the  three months and year ended December 31, 2013.  Year to Date and Fourth Quarter 2013 Highlights (In thousands of CAD dollars,  except per unit amounts and as otherwise noted). Funds From Operations ("FFO")  and Adjusted Funds From Operations ("AFFO") in this News Release are based on  "as adjusted" amounts as further explained in Crombie's MD&A for December 31,  2013.            --  Acquisition of a portfolio of 70 retail properties, adding 3             million square feet, from a subsidiary of Sobeys Inc., a             related party, for $991.3 million on November 3, 2013.         --  Portfolio fair value of $3.9 billion.         --  Crombie was assigned an investment grade credit rating of BBB             (low) with a Stable trend by DBRS.         --  FFO for the year ended December 31, 2013 increased 20.0% to             $108,376 or $1.10 per unit Diluted, a 4.1% increase over the             same period in 2012. FFO for the three months ended December             31, 2013 increased 26.7% to $30,324 or $0.27 per unit Diluted,             a 0.4% increase over the same period in 2012.         --  AFFO for the year ended December 31, 2013 increased 21.3% to             $91,525 or $0.94 per unit Diluted, a 5.0% increase over the             same period in 2012. AFFO for the three months ended December             31, 2013 increased 27.4% to $25,493 or $0.23 per unit Diluted,             a 1.1% increase over the same period in 2012.         --  FFO payout ratio of 79.9% for the year ended December 31, 2013             improved from 83.1% for the same period in 2012. FFO payout             ratio of 83.0% for the quarter ended December 31, 2103             increased slightly compared to 82.7% for the same period in             2012. AFFO payout ratio improved by 4.8% to 94.7% for the year             ended December 31, 2013 from 99.5% for the year ended December             31, 2012. AFFO payout ratio of 98.8% for the quarter ended             December 31, 2103 improved slightly from 99.1% for the same             period in 2012.         --  Solid growth of 1.9% in Same-Asset Cash Net Operating Income             ("NOI") for the year ended December 31, 2013 over the year             ended December 31, 2012. Same-Asset Cash NOI growth of 1.3% for             the three months ended December 31, 2013 compared to the same             period in 2012.         --  Property revenue of $296,558 for the year ended December 31,             2013, an increase of $40,536 or 15.8% over the $256,022 for the             year ended December 31, 2012. Q4 property revenue of $83,950,             increased $15,480 or 22.6% over Q4 2012.         --  Occupancy, on a committed basis, was 93.2% at December 31,             2013, an improvement from 92.2% at September 30, 2013, and             unchanged from December 31, 2012.The December 31, 2013 leased             space is impacted by the acquisition of 70 fully-occupied             properties in the fourth quarter of 2013 and offset by lease             expiries of three Zellers since December 31, 2012, totaling             262,000 square feet.         --  Crombie completed leasing activity on a total of 1,105,000             square feet during the year ended December 31, 2013, including:       o Renewals on 486,000 square feet of 2013 expiring leases at an         average rate of $12.99 per square foot, an increase of 7.2% over         the expiring lease rate.       o Renewals on 170,000 square feet of 2014 and later expiring leases         at an average rate of $19.89 per square foot, an increase of 23.9%         over the expiring lease rate; and       o New leases on 449,000 square feet of space, at an average rate of         $16.30 per square foot.         --  Weighted average lease term of 10.4 years and weighted average             mortgage term of 8.0 years; amongst the longest and most             defensive in the REIT industry.         --  Weighted average interest rate on mortgages reduced to 4.82%             from 5.21% at December 31, 2012. Strong 2.73 times interest             coverage.         --  Debt to Gross Book Value (fair value basis) of 53.0% (55.9% on             a cost basis).  Donald E. Clow, FCA, President and CEO commented: "During 2013 we made  significant progress on our long-term strategy by accretively growing our high  quality grocery and drug store anchored portfolio by over 40% or $1.2 billion  including the acquisition of the T&T and Safeway portfolios mostly in urban  markets in Western Canada. In addition, our disciplined approach continued to  improve our credit quality and access to capital which was recognized with the  attainment of an investment grade credit rating."  Financial Highlights  Crombie's key financial metrics for the three months and year ended December  31, 2013 are as follows:                                                                                 (In thousands of Three months ended December    Year ended December 31,     CAD dollars,                             31,     except per unit     amounts and          2013               2012           2013        2012     as otherwise     noted)                                                Property revenue $ 83,950   $         68,470      $ 296,558   $ 256,022     Operating income                                                  attributable to     Unitholders      $  (492)   $         11,825      $  36,552   $  39,735     Operating income                                                  attributable to     Unitholders per     unit - basic     $ (0.00)   $           0.13      $    0.38   $    0.48     Operating income                                                  attributable to     Unitholders per     unit - diluted   $ (0.00)   $           0.13      $    0.38   $    0.48     FFO              $ 30,324   $         23,941      $ 108,376   $  90,327     FFO per unit -                                                    basic            $   0.27   $           0.27      $    1.12   $    1.09     FFO per unit -                                                    diluted          $   0.27   $           0.27      $    1.10   $    1.06     FFO payout ratio                       82.7%                      (%)                 83.0%                             79.9%       83.1%     AFFO             $ 25,493   $         19,997      $  91,525   $  75,478     AFFO per unit -                                                   basic            $   0.23   $           0.23      $    0.95   $    0.91     AFFO per unit -                                                   diluted          $   0.23   $           0.22      $    0.94   $    0.89     Distributions                                                     per unit         $   0.22   $           0.22      $    0.89   $    0.89     AFFO payout                            99.1%                      ratio (%)           98.8%                             94.7%       99.5%  The increase in FFO and AFFO for the three months and year ended December 31,  2013 was primarily due to acquisition and redevelopment activity during 2013  and 2012. The three months ended December 31, 2013 was also impacted by lower  finance costs related to refinancing activity.  The table below presents a summary of financial performance for the three  months and year ended December 31, 2013 compared to the same period in fiscal  2012.                                             Three months ended December    Year ended December 31,                                             31,     (In thousands     of CAD dollars)       2013             2012         2013           2012                                                                                 Property                                                       revenue         $   83,950   $       68,470   $  296,558   $   256,022     Property                             25,804                    operating     expenses            28,563                       106,673        94,522     Property NOI        55,387           42,666      189,885       161,500     NOI margin                            62.3%                    percentage           66.0%                         64.0%         63.1%     Other items:                                                              Lease                                 3,458                    terminations            80                           485         3,844     Gain on                                   -                    derecognition     of investment     properties           2,422                         2,858             -     Impairment of                             -                    investment     properties        (12,270)                      (12,270)             -     Depreciation                       (12,493)                    and     amortization      (15,045)                      (50,028)      (44,570)     General and                         (3,667)                    administrative     expenses           (4,243)                      (13,666)      (11,530)     Operating                            29,964                    income before     finance costs     and taxes           26,331                       117,264       109,244     Finance costs -                    (16,639)                    operations        (29,098)                      (82,387)      (69,409)     Operating                            13,325                    income before     taxes              (2,767)                        34,877        39,835     Taxes -                             (1,500)                    deferred             2,275                         1,675         (100)     Operating                            11,825                    income     attributable to     Unitholders          (492)                        36,552        39,735     Finance costs -                    (19,809)                    distributions     to Unitholders    (25,157)                      (86,620)      (75,079)     Finance costs -                       3,984                    change in fair     value of     financial     instruments            422                         2,473       (1,878)     Decrease in net                                                assets     attributable to     Unitholders     $ (25,227)   $      (4,000)   $ (47,595)   $ (37,222)  Growth Highlights                                                          Initial                                                         Purchase   Occupancy       Key                                                GLA         Price        Rate     Tenants     Acquisitions in                                                    Q1                                                                                                                                                                  Clearwater                                                               Sobeys,       Landing                                                                  The Brick,                                                                                Mark's                                                                                Work                                                                                Wearhouse,                       Fort McMurray   AB   143,000   $    62,757        100%   Sport Chek       West Lethbridge                                      Towne Centre    Lethbridge      AB   105,000        37,869        100%   Safeway       Namao Centre                                                             Shoppers                       Edmonton        AB    34,000        14,544         85%   Drug Mart       West Highland                                                            Shoppers       Towne Centre    Lethbridge      AB    29,000        16,720         95%   Drug Mart       Dartmouth                                                                Empire       Crossing        Halifax         NS    45,000        15,450        100%   Theatres       Findlay Blvd.   Riverview       NB    66,000        14,650        100%   Sobeys       Riviere-du-Loup                                                          Societe                                                                                des                                                                                alcools du                       Riviere-du-Loup QC     9,000         2,455        100%   Quebec     Acquisition in Q2                                                                  Beaumont                                             Shopping Centre Beaumont        AB    59,000        20,875        100%   Sobeys     Acquisitions in                                                    Q3                                                                                 Whyte Avenue                                                             Shoppers                       Edmonton        AB    21,000        20,565        100%   Drug Mart       Saskatchewan    Portage La                                               Shoppers       Avenue East     Prairie         MB    20,000         7,362        100%   Drug Mart       Weston Road                                                              Shoppers                       Toronto         ON    15,000         6,758        100%   Drug Mart       Westminister                                                             Shoppers       Avenue North    Montreal        QC    21,000         9,685        100%   Drug Mart     Acquisitions in                                                    Q4                                                                               70 Safeway                                                         Properties        AB, BC, MB, SK     3,105,000       991,300        100%   Safeway     Total for 2013                       3,672,000   $ 1,220,990                  These acquisitions continue Crombie's growth strategy of acquiring high  quality grocery or drug store anchored retail properties in the top 36 markets  in Canada.  Operating Highlights                                                                                                  Three months ended December Year ended December 31,                                               31,     (In thousands of      2013               2012        2013        2012     CAD dollars)     Property NOI      $ 55,387   $         42,666   $ 189,885   $ 161,500     Non-cash                              (1,245)                   straight-line     rent               (1,934)                        (5,484)     (4,809)     Non-cash tenant                         1,533                   incentive     amortization         2,165                          8,026       6,332     Property cash NOI   55,618             42,954     192,427     163,023     Acquisition,                            9,363                   disposition and     redevelopment     property cash NOI   21,602                         52,650      25,870     Same-asset                                                      property cash NOI $ 34,016   $         33,591   $ 139,777   $ 137,153  Property NOI, on a cash basis, excludes straight-line rent recognition and  amortization of tenant incentive amounts. The 1.9% increase in same-asset cash  NOI for the year ended December 31, 2013 is primarily the result of increased  average rent per square foot from leasing activity, improved recovery rates  and land use intensifications at several properties. The 1.3% increase in  same-asset cash NOI for the three months ended December 31, 2013 is primarily  the result of increased average rent per square foot from leasing activity and  land use intensification at several properties.  Crombie believes that cash NOI is a better measure of AFFO sustainability and  same-asset property performance.                                               Three months ended December Year ended December 31,                                              31,     (In thousands of     2013               2012       2013         2012     CAD dollars)     Acquisition,                                                  disposition and     redevelopment     property revenue $ 28,838   $         13,856   $ 78,207   $   43,156     Acquisition,     disposition and     redevelopment     property     operating     expenses            6,990              5,069     24,558       17,683     Acquisition,                                                  disposition and     redevelopment     property NOI     $ 21,848   $          8,787   $ 53,649   $   25,473     Margin %            75.8%              63.4%      68.6%        59.0%  Capital Highlights                                           Year ended December 31,                                                2013          2012     Weighted Average Mortgage Term        8.0 years     7.4 years     Weighted Average Interest Rate            4.82%        5.21 %     Debt to Gross Book Value (Fair Value)    53.0 %        46.5 %     Debt to Gross Book Value (Cost)          55.9 %        50.0 %     Interest Coverage                          2.73          2.61     Debt Service Coverage                      1.79          1.76  Crombie's objectives when managing its capital structure are to optimize  weighted average cost of capital; maintain financial flexibility through  access to long-term debt and equity markets; and maintain ample liquidity. In  pursuit of these objectives, Crombie utilizes staggered debt maturities,  optimizes its ongoing exposure to floating rate debt, pursues a range of fixed  rate secured and unsecured debt and maintains sustainable payout ratios.  Crombie has an authorized floating rate revolving credit facility of up to  $285,000, subject to available borrowing base, of which $120,000 was drawn as  at December 31, 2013, and an additional $4,135 encumbered by outstanding  letters of credit, resulting in significant available liquidity.  Debt to gross book value on a fair value basis is 53.0% (including convertible  debentures) at December 31, 2013, compared to 46.5% at December 31, 2012.  General and Administrative Expenses  General and administrative expenses for the year ended December 31, 2013 as a  percentage of property revenue, increased by 0.1% from 4.5% to 4.6%, when  compared to the same period in 2012. For the three months ended December 31,  2013, general and administrative expenses as a percentage of property revenue,  decreased by 0.3% from 5.4% to 5.1%, when compared to the same period in 2012.  Definition of Non-GAAP Measures  Certain financial measures included in this news release do not have  standardized meaning under IFRS and therefore may not be comparable to  similarly titled measures used by other publicly traded entities.  Crombie  includes these measures because it believes certain investors use these  measures as a means of assessing Crombie's financial performance.         --  Property NOI is property revenue less property operating             expenses.         --  Property Cash NOI is Property NOI adjusted to remove non-cash             straight-line rent and tenant incentive amortization.         --  Debt is defined as bank loans plus investment property debt,             senior unsecured notes and convertible debentures.         --  Gross book value means, at any time, the book value of the             assets of Crombie and its consolidated subsidiaries plus             deferred financing charges, accumulated depreciation and             amortization in respect of Crombie's properties (and related             intangible assets) and cost of any below-market component of             properties less (i) the amount of any receivable reflecting             interest rate subsidies on any debt assumed by Crombie; (ii)             subscription receipts held in trust; and (iii) the amount of             deferred income tax liability arising out of the fair value             adjustment in respect of the indirect acquisitions of certain             properties. Gross book value (fair value basis) differs from             gross book value as defined above in that it includes Crombie's             investment properties at fair value and excludes the book value             of investment properties and related accumulated depreciation             and amortization as well as intangible assets, tenant             incentives and accumulated straight-line rent receivable.         --  EBITDA is calculated as property revenue, adjusted to remove             the impact of amortization of tenant incentives, less property             operating expenses and general and administrative expenses.         --  FFO is calculated as Increase (decrease) in net assets             attributable to Unitholders (computed in accordance with IFRS),             excluding gains (or losses) from sales of depreciable real             estate, plus depreciation and amortization expense, deferred             income taxes, finance costs - distributions to Unitholders,             impairment charges and recoveries and change in fair value of             financial instruments.         --  AFFO is defined as FFO adjusted for non-cash amounts affecting             revenue, amortization of effective swap agreements, less             maintenance capital expenditures, maintenance tenant incentives             and deferred leasing costs, and the settlement of effective             interest rate swap agreements.  About Crombie  Crombie is an open-ended real estate investment trust established under, and  governed by, the laws of the Province of Ontario. Crombie currently owns a  portfolio of 249 commercial properties across Canada, comprising approximately  17.6 million square feet with a strategy to own and operate a portfolio of  high quality grocery and drug store anchored shopping centres and freestanding  stores in Canada's top 36 markets.  This news release contains forward-looking statements that reflect the current  expectations of management of Crombie about Crombie's future results,  performance, achievements, prospects and opportunities. Wherever possible,  words such as "may", "will", "estimate", "anticipate", "believe", "expect",  "intend" and similar expressions have been used to identify these  forward-looking statements. These statements reflect current beliefs and are  based on information currently available to management of Crombie.  Forward-looking statements necessarily involve known and unknown risks and  uncertainties. A number of factors, including those discussed in the 2013  annual Management Discussion and Analysis under "Risk Management", could cause  actual results, performance, achievements, prospects or opportunities to  differ materially from the results discussed or implied in the forward-looking  statements. These factors should be considered carefully and a reader should  not place undue reliance on the forward-looking statements. There can be no  assurance that the expectations of management of Crombie will prove to be  correct. Readers are cautioned that such forward-looking statements are  subject to certain risks and uncertainties that could cause actual results to  differ materially from these statements. Crombie can give no assurance that  actual results will be consistent with these forward-looking statements.  Crombie's consolidated financial statements and management's discussion and  analysis for the three months and year ended December 31, 2013 can be found on  Crombie's web site at www.crombiereit.com or on the SEDAR web site for  Canadian regulatory filings at www.sedar.com.  Conference Call Invitation  Crombie will provide additional details concerning its year ended December 31,  2013  results on a conference call to be held Thursday, February 27, 2014, at  2:00 p.m. Eastern time. To join this conference call you may dial (647)  427-7450 or (888) 231-8191. You may also listen to a live audio web cast of  the conference call by visiting Crombie's website located at  www.crombiereit.com. Replay will be available until midnight March 13, 2014 by  dialing (416) 849-0833 or (855) 859-2056 and entering pass code 92921878, or  on the Crombie website for 90 days after the meeting.    SOURCE  Crombie REIT  Glenn Hynes, FCA Chief Financial Officer and Secretary Crombie REIT (902)  755-8100  To view this news release in HTML formatting, please use the following URL:  http://www.newswire.ca/en/releases/archive/February2014/26/c6322.html  CO: Crombie REIT ST: Nova Scotia NI: ERN CONF