Click here to close now.

Welcome!

.NET Authors: Jayaram Krishnaswamy, Adine Deford, Peter Silva, Pat Romanski, Kevin Benedict

News Feed Item

Granite Announces 2012 Third Quarter Results

TORONTO, Nov. 7, 2012 /PRNewswire/ - Granite Real Estate Inc. (TSX: GRT; NYSE: GRP) ("Granite" or the "Company") today announced its results for the three and nine month periods ended September 30, 2012 and declared a Canadian ("Cdn.") dollar denominated dividend of $0.50 per share on the Company's Common Shares.

"Our financial results for the third quarter continue to demonstrate stability in rental revenues and overall cash flows. In addition, we are pleased to report that, year to date, we have renewed or extended 13 leases with Magna and its operating subsidiaries, including all but one of the 2012 expires, representing approximately 2.4 million square feet. In the quarter we also made considerable progress towards completing the conversion to a Real Estate Investment Trust, with the upcoming shareholder meeting to approve the conversion set for November 15th," commented Tom Heslip, Chief Executive Officer.

Granite's consolidated results for the three and nine month periods ended September 30, 2012 and 2011 are summarized below (all figures are in Cdn. dollars):

                 
(in thousands, except per share figures)     Three months ended
September 30,
  Nine months ended
September 30,
          2012 2011     2012 2011
          (previously reported
in US dollars)
      (previously reported
in US dollars)
Revenues(1)     $ 44,685 $ 45,485   $ 135,800 $ 134,577
                       
Income before income taxes     $ 21,962 $ 18,141   $ 68,694 $ 49,119
Income from continuing operations(1) (3)               18,919        15,277           56,189        54,328
Income from discontinued operations(1)                   --             --                 --   94,449
Net income     $ 18,919 $ 15,277   $ 56,189 $ 148,777
                         
Diluted earnings per share from:                      
  - continuing operations     $ 0.40 $ 0.33   $ 1.20 $ 1.16
  - discontinued operations                  --            --                --           2.01
Diluted earnings per share     $ 0.40 $ 0.33   $ 1.20 $ 3.17
                       
Funds from operations ("FFO")(2)     $ 29,446 $ 25,902   $ 88,226 $ 85,976
Diluted FFO per share (2)     $ 0.63 $ 0.55   $ 1.88 $ 1.83

__________________________

(1) Following the close of business on June 30, 2011, the Racing & Gaming Business, substantially all of the Company's lands held for development, a property in the United States and an income-producing property in Canada (the "Arrangement Transferred Assets & Business") were transferred to entities owned by Mr. Frank Stronach and his family (the "Stronach Shareholder") in consideration for the elimination of the Company's dual class share structure (the "Arrangement").  The operating results of the Arrangement Transferred Assets & Business have been presented as discontinued operations.  Income from continuing operations pertains to the Company's income-producing property portfolio.

(2) FFO and diluted FFO per share are measures widely used by analysts and investors in evaluating the operating performance of real estate companies.  However, FFO does not have a standardized meaning under U.S. generally accepted accounting principles and therefore may not be comparable to similar measures presented by other companies.  The Company determines FFO using the definition prescribed in the United States by the National Association of Real Estate Investment Trusts®.  For a reconciliation of FFO to income from continuing operations, please refer to the section titled "Reconciliation of Funds from Operations to Income from Continuing Operations".

(3) Income from continuing operations for the nine month period ended September 30, 2011 includes the recovery of $12.9 million in income tax resulting from an internal amalgamation that was set aside and cancelled by the courts.

SPECIAL SHAREHOLDER MEETING TO APPROVE CONVERSION TO A REAL ESTATE INVESTMENT TRUST


A special shareholder meeting will take place on November 15, 2012 to seek the approval of the Company's conversion to a Canadian Real Estate Investment Trust (the "REIT Conversion"). The REIT Conversion is a key component of the Company's strategic plan announced in October 2011 and was expected, at the time, to result in a significant reduction in annual cash income taxes estimated to be approximately $8.0 million. The REIT structure, as now proposed, is expected to reduce Granite's cash income taxes for 2013 by approximately $11.0 million. If the REIT Conversion is approved, the Company expects to be a REIT on or about December 31, 2012, and beginning in fiscal 2013, the new REIT is expected to commence monthly distributions of $0.175 per stapled unit (an increase in the annual distribution to $2.10 per stapled unit from the current annual dividend of $2.00 per share). The first distribution to be declared for the month of January 2013 is expected to be paid on or about February 15, 2013. The REIT Conversion is subject to customary conditions and approvals, including court approval.   On completion of the REIT Conversion, shareholders of Granite will exchange their Common Shares for a stapled unit comprised of one common share of Granite REIT Inc. and one unit of Granite Real Estate Investment Trust.  The assets, liabilities and operations of the new combined stapled unit structure will be comprised of all the assets, liabilities and operations of Granite.

CURRENCY CHANGE FOR FINANCIAL REPORTING


Effective January 1, 2012, the Company'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 unaudited interim consolidated financial statements and related Management's Discussion and Analysis for the three and nine month periods ended September 30, 2012 has been recast to reflect the Company's results as if the information had been historically reported in Cdn. dollars.  As a result of the change in reporting currency, dividends are declared in Cdn. dollars. Please refer to the section titled "Dividends". The Company continues to report in accordance with U.S. generally accepted accounting principles.

GRANITE'S CONSOLIDATED FINANCIAL RESULTS


Three Month Period Ended September 30, 2012

For the three month period ended September 30, 2012, rental revenue decreased by $0.8 million from $45.5 million in the third quarter of 2011 to $44.7 million in the third 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.

The Company's income from continuing operations and net income was $18.9 million in the third quarter of 2012 compared to $15.3 million in the prior year period. The increase of $3.6 million was primarily due to (i) a decrease in general and administrative expenses of $4.5 million (primarily due to reduced employee termination expense) and (ii) lower depreciation and amortization expense of $0.2 million, partially offset by (i) a decrease in rental revenue of $0.8 million, (ii) higher income tax expense of $0.1 million and (iii) lower gains on disposal of real estate of $0.1 million.

FFO for the third quarter of 2012 increased $3.5 million from $25.9 million in the prior year period to $29.4 million in the current period primarily due to the $3.6 million increase in income from continuing operations.

Nine Month Period Ended September 30, 2012

Continuing Operations

For the nine month period ended September 30, 2012, rental revenue increased by $1.2 million from $134.6 million in 2011 to $135.8 million in 2012 primarily due to completed projects coming on-stream, the additional rent earned from contractual rent increases and renewals and re-leasing of income-producing properties partially offset by the unfavourable effects of changes in foreign currency exchange rates.

The Company's income from continuing operations was $56.2 million in the nine month period ended September 30, 2012 compared to $54.3 million in the prior year period. Income from continuing operations in the nine month period ended September 30, 2011 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 $14.8 million primarily due to (i) an increase in rental revenue of $1.2 million, (ii) a reduction in general and administrative expenses of $16.2 million (primarily related to reduced advisory costs, decreased insurance expense, decreased compensation expense to former executives of the Company and higher retainer fees in 2011 due to the Arrangement), (iii) an increase in foreign exchange gains of $0.7 million and (iv) the decrease in the write-down of a long-lived asset of $2.7 million. Partially offsetting these increases were (i) higher property operating costs of $0.8 million, (ii) an increase of $0.3 million in depreciation and amortization expense and (iii) an increase of income tax expense of $4.8 million, excluding the income tax recovery noted above.

FFO for the nine month period ended September 30, 2012 increased $2.2 million from $86.0 million in the prior year period to $88.2 million primarily due to the $1.9 million increase in income from continuing operations and the $0.3 million increase in depreciation and amortization expense.

Discontinued Operations

Income from discontinued operations for the nine month period ended September 30, 2011 of $94.4 million is primarily comprised of the net gain on the disposal of the Arrangement Transferred Assets & Business of $87.4 million.

Net income for the nine month period ended September 30, 2012 decreased by $92.6 million to $56.2 million from $148.8 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 $1.9 million.

A more detailed discussion of Granite's consolidated financial results for the three and nine month periods ended September 30, 2012 and 2011 is contained in the Company's Management's Discussion and Analysis of Results of Operations and Financial Position and the unaudited interim consolidated financial statements and notes thereto, which are available through the internet on Canadian Securities Administrators' Systems for Electronic Document Analysis and Retrieval (SEDAR) and can be accessed at www.sedar.com and on the United States Securities and Exchange Commission's Electronic Data Gathering, Analysis and Retrieval System (EDGAR) which can be accessed at www.sec.gov.

RECONCILIATION OF FUNDS FROM OPERATIONS TO INCOME FROM CONTINUING OPERATIONS



          Three months ended
      September  30,
  Nine months ended
September 30,
(in thousands, except per share information)          2012 2011      2012 2011
              (previously reported in
US dollars)
      (previously reported in
US dollars)
Income from continuing operations       $ 18,919 $ 15,277   $ 56,189 $ 54,328
Add back depreciation and amortization                 10,506         10,716             32,016         31,739
Add back (deduct) loss (gain) on disposal of real estate                        21               (91)                    21               (91)
Funds from operations       $ 29,446 $ 25,902   $ 88,226 $ 85,976
                           
Basic and diluted funds from operations per share       $ 0.63 $ 0.55   $ 1.88 $ 1.83
                           
Basic number of shares outstanding                 46,824     46,843             46,863          46,894
Diluted number of shares outstanding                 46,846          46,862             46,883          46,996

DIVIDENDS


Granite's Board of Directors has declared a dividend of Cdn. $0.50 per share on the Company's Common Shares for the third quarter ended September 30, 2012.  The dividend is payable on or about December 13, 2012 to shareholders of record at the close of business on November 23, 2012. The Common Shares will begin trading on an ex-dividend basis at the opening of trading on November 21, 2012.

Unless indicated otherwise, Granite has designated the entire amount of all past and future taxable dividends paid since January 1, 2006 to be an "eligible dividend" for purposes of the Income Tax Act (Canada).

CONFERENCE CALL


Granite will hold a conference call on Thursday, November 8, 2012 at 8:30 a.m. Eastern time.  The number to use for this call is 1-800-619-2736.  Overseas callers should use +1-416-981-9084.  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 21608649) and will be available until Thursday, November 15, 2012.

ABOUT GRANITE


Granite is a Canadian-based real estate company engaged in the ownership and management of predominantly industrial properties in Canada, the United States, Mexico and Europe. The Company owns and manages approximately 28 million square feet in 104 rental income properties. Our tenant base currently includes operating subsidiaries of Magna International Inc. (together "Magna") as our largest tenants, together with tenants from other industries.

OTHER INFORMATION


Additional property statistics have been posted to our website at http://www.graniterealestate.com/uploads/File/propertystatistics.pdf.  Copies of financial data and other publicly filed documents are available through the internet on Canadian Securities Administrators' Systems for Electronic Document Analysis and Retrieval (SEDAR) which can be accessed at www.sedar.com and on the United States Securities and Exchange Commission's Electronic Data Gathering, Analysis and Retrieval System (EDGAR) which can be accessed at www.sec.gov.  For further information about Granite, please see our website at www.graniterealestate.com.

FORWARD-LOOKING STATEMENTS

This press release may contain statements that, to the extent they are not recitations of historical fact, constitute "forward-looking statements" within the meaning of applicable securities legislation, including the United States Securities Act of 1933 and the United States Securities Exchange Act of 1934.  Forward-looking statements may include, among others, statements regarding the Company's future plans, goals, strategies, intentions, beliefs, estimates, costs, objectives, economic performance or expectations, or the assumptions underlying any of the foregoing.  In particular, this press release contains forward-looking statements regarding our proposed conversion to a REIT. Words such as "may", "would", "could", "will", "likely", "expect", "anticipate", "believe", "intend", "plan", "forecast", "project", "estimate" and similar expressions are used to identify forward-looking statements.  Forward-looking statements should not be read as guarantees of future events, performance or results and will not necessarily be accurate indications of whether or the times at or by which such future performance will be achieved.  Undue reliance should not be placed on such statements. In particular, Granite cautions that the timing or completion of the REIT Conversion cannot be predicted with certainty, and there can be no assurance at this time that all required or desirable approvals and consents to effect the REIT Conversion will be obtained in a timely manner or at all and there can be no assurance that the anticipated reduction in cash income taxes payable following the REIT Conversion will be realized. Forward-looking statements are based on information available at the time and/or management's good faith assumptions and analyses made in light of our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate in the circumstances, and are subject to known and unknown risks, uncertainties and other unpredictable factors, many of which are beyond the Company's control, that could cause actual events or results to differ materially from such forward-looking statements.  Important factors that could cause such differences include, but are not limited to, the risk of changes to tax or other laws that may adversely affect the REIT Conversion; inability of Granite to implement a suitable structure for the REIT Conversion; the inability to obtain all required consents and approvals for the REIT Conversion; the inability 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 the Company's Annual Information Form for 2011, filed on SEDAR at www.sedar.com and attached as Exhibit 1 to the Company's Annual Report on Form 40-F for the year ended December 31, 2011, and in the notice of special meeting of shareholders and management information circular/proxy statement in respect of the special meeting of shareholders dated October 11, 2012, and also filed on SEDAR, 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, the Company expressly disclaims any intention and undertakes no obligation to update or revise any forward-looking statements contained in this press release to reflect subsequent information, events or circumstances or otherwise. 

 

SOURCE Granite Real Estate Inc.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

@ThingsExpo Stories
SYS-CON Events announced today that Liaison Technologies, a leading provider of data management and integration cloud services and solutions, has been named "Silver Sponsor" of SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York, NY. Liaison Technologies is a recognized market leader in providing cloud-enabled data integration and data management solutions to break down complex information barriers, enabling enterprises to make smarter decisions, faster.
SYS-CON Events announced today that Solgenia will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY, and the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Solgenia is the global market leader in Cloud Collaboration and Cloud Infrastructure software solutions. Designed to “Bridge the Gap” between Personal and Professional Social, Mobile and Cloud user experiences, our solutions help large and medium-sized organizations dr...
Connected devices and the Internet of Things are getting significant momentum in 2014. In his session at Internet of @ThingsExpo, Jim Hunter, Chief Scientist & Technology Evangelist at Greenwave Systems, examined three key elements that together will drive mass adoption of the IoT before the end of 2015. The first element is the recent advent of robust open source protocols (like AllJoyn and WebRTC) that facilitate M2M communication. The second is broad availability of flexible, cost-effective storage designed to handle the massive surge in back-end data in a world where timely analytics is e...
SYS-CON Events announced today that Akana, formerly SOA Software, has been named “Bronze Sponsor” of SYS-CON's 16th International Cloud Expo® New York, which will take place June 9-11, 2015, at the Javits Center in New York City, NY. Akana’s comprehensive suite of API Management, API Security, Integrated SOA Governance, and Cloud Integration solutions helps businesses accelerate digital transformation by securely extending their reach across multiple channels – mobile, cloud and Internet of Things. Akana enables enterprises to share data as APIs, connect and integrate applications, drive part...
Cloud is not a commodity. And no matter what you call it, computing doesn’t come out of the sky. It comes from physical hardware inside brick and mortar facilities connected by hundreds of miles of networking cable. And no two clouds are built the same way. SoftLayer gives you the highest performing cloud infrastructure available. One platform that takes data centers around the world that are full of the widest range of cloud computing options, and then integrates and automates everything. Join SoftLayer on June 9 at 16th Cloud Expo to learn about IBM Cloud's SoftLayer platform, explore se...
SYS-CON Events announced today that CommVault has been named “Bronze Sponsor” of SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY, and the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. A singular vision – a belief in a better way to address current and future data management needs – guides CommVault in the development of Singular Information Management® solutions for high-performance data protection, universal availability and sim...
SYS-CON Media announced today that @ThingsExpo Blog launched with 7,788 original stories. @ThingsExpo Blog offers top articles, news stories, and blog posts from the world's well-known experts and guarantees better exposure for its authors than any other publication. @ThingsExpo Blog can be bookmarked. The Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation of the Worldwide Web more than 20 years ago.
The 3rd International Internet of @ThingsExpo, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that its Call for Papers is open. The Internet of Things (IoT) is the biggest idea since the creation of the Worldwide Web more than 20 years ago.
The WebRTC Summit 2014 New York, to be held June 9-11, 2015, at the Javits Center in New York, NY, announces that its Call for Papers is open. Topics include all aspects of improving IT delivery by eliminating waste through automated business models leveraging cloud technologies. WebRTC Summit is co-located with 16th International Cloud Expo, @ThingsExpo, Big Data Expo, and DevOps Summit.
The Internet of Things promises to transform businesses (and lives), but navigating the business and technical path to success can be difficult to understand. In his session at @ThingsExpo, Sean Lorenz, Technical Product Manager for Xively at LogMeIn, demonstrated how to approach creating broadly successful connected customer solutions using real world business transformation studies including New England BioLabs and more.
SYS-CON Media announced today that 9 out of 10 " most read" DevOps articles are published by @DevOpsSummit Blog. Launched in October 2014, @DevOpsSummit Blog offers top articles, news stories, and blog posts from the world's well-known experts and guarantees better exposure for its authors than any other publication. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long development cycles that produce softw...
The world's leading Cloud event, Cloud Expo has launched Microservices Journal on the SYS-CON.com portal, featuring over 19,000 original articles, news stories, features, and blog entries. DevOps Journal is focused on this critical enterprise IT topic in the world of cloud computing. Microservices Journal offers top articles, news stories, and blog posts from the world's well-known experts and guarantees better exposure for its authors than any other publication. Follow new article posts on Twitter at @MicroservicesE
SYS-CON Events announced today that Site24x7, the cloud infrastructure monitoring service, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Site24x7 is a cloud infrastructure monitoring service that helps monitor the uptime and performance of websites, online applications, servers, mobile websites and custom APIs. The monitoring is done from 50+ locations across the world and from various wireless carriers, thus providing a global perspective of the end-user experience. Site24x7 supports monitoring H...
Wearable technology was dominant at this year’s International Consumer Electronics Show (CES) , and MWC was no exception to this trend. New versions of favorites, such as the Samsung Gear (three new products were released: the Gear 2, the Gear 2 Neo and the Gear Fit), shared the limelight with new wearables like Pebble Time Steel (the new premium version of the company’s previously released smartwatch) and the LG Watch Urbane. The most dramatic difference at MWC was an emphasis on presenting wearables as fashion accessories and moving away from the original clunky technology associated with t...
SYS-CON Events announced today that SafeLogic has been named “Bag Sponsor” of SYS-CON's 16th International Cloud Expo® New York, which will take place June 9-11, 2015, at the Javits Center in New York City, NY. SafeLogic provides security products for applications in mobile and server/appliance environments. SafeLogic’s flagship product CryptoComply is a FIPS 140-2 validated cryptographic engine designed to secure data on servers, workstations, appliances, mobile devices, and in the Cloud.
One of the biggest challenges when developing connected devices is identifying user value and delivering it through successful user experiences. In his session at Internet of @ThingsExpo, Mike Kuniavsky, Principal Scientist, Innovation Services at PARC, described an IoT-specific approach to user experience design that combines approaches from interaction design, industrial design and service design to create experiences that go beyond simple connected gadgets to create lasting, multi-device experiences grounded in people's real needs and desires.
The list of ‘new paradigm’ technologies that now surrounds us appears to be at an all time high. From cloud computing and Big Data analytics to Bring Your Own Device (BYOD) and the Internet of Things (IoT), today we have to deal with what the industry likes to call ‘paradigm shifts’ at every level of IT. This is disruption; of course, we understand that – change is almost always disruptive.
Containers and microservices have become topics of intense interest throughout the cloud developer and enterprise IT communities. Accordingly, attendees at the upcoming 16th Cloud Expo at the Javits Center in New York June 9-11 will find fresh new content in a new track called PaaS | Containers & Microservices Containers are not being considered for the first time by the cloud community, but a current era of re-consideration has pushed them to the top of the cloud agenda. With the launch of Docker's initial release in March of 2013, interest was revved up several notches. Then late last...
Can call centers hang up the phones for good? Intuitive Solutions did. WebRTC enabled this contact center provider to eliminate antiquated telephony and desktop phone infrastructure with a pure web-based solution, allowing them to expand beyond brick-and-mortar confines to a home-based agent model. It also ensured scalability and better service for customers, including MUY! Companies, one of the country's largest franchise restaurant companies with 232 Pizza Hut locations. This is one example of WebRTC adoption today, but the potential is limitless when powered by IoT.
@ThingsExpo has been named the Top 5 Most Influential M2M Brand by Onalytica in the ‘Machine to Machine: Top 100 Influencers and Brands.' Onalytica analyzed the online debate on M2M by looking at over 85,000 tweets to provide the most influential individuals and brands that drive the discussion. According to Onalytica the "analysis showed a very engaged community with a lot of interactive tweets. The M2M discussion seems to be more fragmented and driven by some of the major brands present in the M2M space. This really allows some room for influential individuals to create more high value inter...