Welcome!

.NET Authors: Yakov Fain, Ian Khan, Pat Romanski, Srinivasan Sundara Rajan, Nitin Bandugula

News Feed Item

Partners REIT Announces Continued Strong Growth in Third Quarter 2012

VICTORIA, BRITISH COLUMBIA -- (Marketwire) -- 11/10/12 -- Partners Real Estate Investment Trust (TSX:PAR.UN) announced today continued strong growth and solid performance for the three and nine months ended September 30, 2012.

Q3 FINANCIAL HIGHLIGHTS (Q3/2012 vs Q3/2011):


--  NOI up 83% to $7.6 million; 
--  NOI (same property) increased by 3% to $3.9 million; 
--  FFO/unit rose to $0.18 from $0.16; 
--  FFO Cash Payout ratio decreases to 85%; 
--  AFFO/unit rose to $0.15 from $0.14; 
--  AFFO Cash Payout ratio decreases to 98%; 
--  Leverage ratios improved as debt/GBV (including debentures) fell from
    73% to 62% and debt/GBV (excluding debentures) fell from 63% to 48%; 
--  Total assets increased by over 70% to $442 million; 
--  Total market capitalization increases by 249% to $186 million.

2012 OPERATIONAL HIGHLIGHTS:


--  Purchase of nine retail and mixed use properties year-to-date for total
    acquisition costs of $143.5 million significantly expands and
    strengthens portfolio; 
--  Portfolio growth and solid increase in year-to-date same property Net
    Operating Income fuel significant and accretive increases in Funds from
    Operations and Adjusted Funds from Operations; 
--  Successful completion of two bought deal equity offerings and
    convertible unsecured debenture issue raise $75.5 million in net
    proceeds to fund growth; 
--  Balance sheet and liquidity position remain strong with conservative
    debt and coverage ratios. 
--  New 15-year lease with Wal-Mart Canada significantly enhances overall
    quality of tenant base.

"We are now beginning to see the considerable benefits of our portfolio growth as we generated solid increases in our key operating and financial performance metrics during the third quarter," commented Adam Gant, Chief Executive Officer. "Our strong 3% growth in same property NOI, combined with the contribution from recent acquisitions, resulted in FFO and AFFO more than tripling in the quarter compared to last year and a solid increase from the second quarter of 2012."

"Most importantly, despite the significant increase in the weighted average number of units outstanding this year, our growth has been highly accretive as FFO per Unit and AFFO per Unit rose 13% and 17% respectively through the first nine months of 2012."

Significant Growth

During the first nine months of 2012 the REIT acquired nine well-located retail and mixed-use properties in British Columbia, Alberta, Ontario and Quebec aggregating approximately 569,000 square feet of gross leasable area ("GLA") for a total purchase price of approximately $143.5 million. The acquisitions were funded by the a new credit facility of $14.0 million bearing interest at 3.6%, the acquisition of new and the assumption of existing mortgages totaling $66.4 million bearing effective interest rates of between 3.58% and 4.3%, $56.2 million in proceeds from the acquisition of NorRock Realty Finance Corporation in the first quarter of 2012, and a portion of the net proceeds from two equity offerings completed on February 8, 2012 and June 13, 2012. During the third quarter proceeds from the REIT's convertible debenture offering were used to repay the credit facility and the REIT secured a new variable-rate, revolving credit facility in order to fund future acquisitions.

With these acquisitions, the REIT's portfolio at September 30, 2012 consisted of 30 well-located retail and mixed-use properties in Ontario, Quebec, Manitoba, British Columbia and Alberta aggregating approximately 2.2 million square feet of GLA.

Subsequent to the end of the third quarter the REIT announced it would be acquiring two retail centres in Montreal aggregating approximately 105,000 square feet for a purchase price of approximately $21.9 million.

Strong Operating Performance

Weighted average occupancy at September 30, 2012 was 96.4%, up from 94.1% at the end of the second quarter of 2012 and compared to 98.2% at the same time last year. The increase from the second quarter of 2012 is due to improved leasing across the portfolio, offset by lower occupancies at certain recently acquired properties and vacancies at certain other properties due to ongoing re-positioning and redevelopment initiatives.

Net Operating Income ("NOI") increased to $7.6 million and $20.7 million in the third quarter and first nine months of 2012, respectively, compared to $4.1 million and $10.8 million in the prior year due primarily to the contribution from acquisitions completed over the prior twelve months. Same property NOI in the third quarter increased a strong 3.0% due primarily to increased rent at a Quebec property resulting from a new lease with Wal-Mart. For the nine months of 2012, same property NOI rose approximately 1.4% due primarily to higher occupancies and increased base rent revenue.

Funds from Operations ("FFO") increased to $3.7 million ($0.18 per unit) and $9.7 million ($0.53 per unit) for the three and nine months ended September 30, 2012, respectively, compared to $1.3 million ($0.16 per unit) and $3.6 million ($0.47 per unit) for the same comparable periods last year. The increases were due primarily to the contribution from acquisitions completed over the prior twelve months. The REIT's FFO cash payout ratio improved to 85% and 87% in the three and nine months ended September 30, 2012, respectively, compared to 92% and 98% in the same periods last year.

Adjusted Funds from Operations ("AFFO") also rose significantly to $3.3 million ($0.15 per unit) and $8.6 million ($0.48 per unit) for the three and nine months ended September 30, 2012, respectively, from $1.1 million ($0.14 per unit) and $3.2 million ($0.41 per unit) for the same prior-year periods. The AFFO cash payout ratio improved to 98% and 97% in the three and nine months ended September 30, 2012, respectively, compared to 106% and 111% in the same periods last year.

The REIT's growth has been accretive on a per Unit basis through the first nine months of 2012 despite the 135% increase in the weighted average number of units outstanding as at September 30, 2012 compared to the same time last year.

Active Leasing

Management remains committed to actively pursuing new leases and lease renewals with the objective of increasing occupancy and weighted average rental income per square foot of gross leasable area. One of the REIT's goals is to generate organic growth through redevelopment and lease renewal activities at its existing centres. As at November 8, 2012 the REIT had lease renewals and new leases of approximately 203,600 square feet. The weighted average rent, including any material new and renewed leases completed by November 8, 2012, was $11.25 per square foot, an increase of $0.77 per square foot from the weighted average rent for leases that expire during the year.

Solid Financial Position

As at September 30, 2012 the REIT's ratio of debt to gross book value improved to 48.3% (62.0% including convertible debentures) compared to 62.9% (73.0% including convertible debentures) at December 31, 2011. Interest coverage and debt service coverage ratios improved to 2.08 times and 1.44 times, respectively, as at September 30, 2012 from 1.70 times and 1.26 times as at December 31, 2011. During the first nine months of 2012 the REIT acquired, assumed and increased mortgages totaling approximately $66.4 million on properties acquired during the period. Overall, the REIT's mortgage portfolio incurred a weighted average effective interest rate of 4.64% at September 30, 2012, an improvement from the 4.95% as at December 31, 2011, with a weighted average term to maturity of approximately 3 years. Over the next two years, the REIT has approximately $45.9 million of debt maturing which carries an average effective interest rate of 5.14%. Management expects to refinance this debt at lower interest rates, positively impacting the REIT's future cash flows. Interest expense savings from refinancing at current market rates are anticipated to continue through 2012 and into the following year.

Recent Events

On September 5, 2012, the REIT closed a public offering of $34.5 million, including an overallotment options, of 6.0% convertible unsecured subordinated debentures maturing on September 30, 2017. The debentures are convertible into units of the REIT at the option of the holder at a conversion price of $10.35 per unit. The REIT received net proceeds of approximately $32.7 million from the offering, which was used to partially repay the outstanding credit facilities.

During the third quarter, the REIT secured a revolving credit facility from a consortium of Canadian chartered banks of up to a formula-based maximum not to exceed $20 million (expandable to $50 million), bearing interest at the bank's prime rate plus 1.0% per annum or the Banker's Acceptance stamping fee plus 2.25% per annum. This facility is currently secured by the King George Square and Crossing Bridge Square properties. As at September 30, 2012, the formula-based amount available under this facility was $15.0 million with no draws made. The facility is renewable annually.

On October 1, 2012 the REIT announced it had agreed to acquire two well-located retail centres situated in close proximity on Nun's Island in Montreal, Quebec. The Centre Village Shopping Centre is a 95,000 square foot retail property anchored by a Loblaws grocery store and a newly-expanded SAQ liquor store, as well as a Royal Bank and a new Starbucks coffee shop. Centre Village is 97% leased. Elgar Place, located nearby, is an 80% occupied 10,000 square foot retail centre anchored by a Couche-Tard convenience store. The REIT will pay approximately $21.9 million for the two properties, utilizing the REIT's credit facility. The two centres are estimated to generate current in-place annualized Net Operating Income of approximately $1.4 million and $0.6 million in annualized Funds from Operations. The transaction is expected to close during the fourth quarter of 2012.

On October 9, 2012 the REIT announced it had entered into a new fifteen-year lease agreement with Wal-Mart Canada Corp. for approximately 90,000 square feet (plus basement storage space) at the REIT's Mega Centre retail property in St. Laurent, (Montreal) Quebec. It is anticipated the new Wal-Mart store will open by the second quarter of 2013

The REIT also announced today that it has agreed to acquire a 43,774 square foot, new format retail centre in Timmins, Ontario. The Timmins West Power Centre is a 100% leased, open-air centre, shadow-anchored by Canadian Tire and Home Depot. The property includes three separate buildings individually occupied by Michaels, Mark's Work Wearhouse, and Reitmans.

The purchase price for the property is approximately $9.95 million, which will be funded by way of assumption of a first mortgage from a Canadian bank for $4.94 million at a rate of 5.998%, maturing in September 2018, where a mark- to-market adjustment to the price of $215,600 was made resulting in an effective rate of approximately 4%, and utilization of the REIT's credit line. The in-place net operating income of $805,000 provides an implied CAP rate of 8.09% and will produce Funds from Operations of approximately $425,000. This new property provides the REIT an opportunity to acquire a stable, accretive, new format retail centre.

The REIT also announced that the Board of Trustees, based on the recommendation of its Audit Committee, has appointed KPMG LLP ("KPMG") as the auditor of the REIT. At the request of the REIT, Deloitte & Touche LLP ("Deloitte") has resigned as the auditor of the REIT.

There were no reservations in Deloitte's audit reports for the fiscal years ended December 31, 2011 and 2010 or any subsequent period, and there are no reportable events, as such term is defined in National Instrument 51-102, between the REIT and Deloitte. The REIT will be filing the required reporting package in accordance with National Instrument 51-102.

Investor Conference Call

A conference call to discuss the recent operating and financial results will be hosted by Adam Gant, Chief Executive Officer and Patrick Miniutti, President, on Tuesday, November 13, 2012 at 2:30 pm ET (11:30 am PT). The telephone numbers for the conference call are Local / International: (416) 849-2698 and North American Toll Free: (866) 400- 2270. The telephone numbers to listen to the call after it is completed (Instant Replay) are Local / International (416) 915-1035 or North American toll free (866) 245-6755. The Passcode for the Instant Replay is 601232#. A recording of the call will also be available on the REIT's web site at www.partnersreit.com.


Financial Highlights                                                        
----------------------------------------------------------------------------
                          As at and for the three   As at and for the nine  
                               months ended              months ended       
                            Sept. 30,    Sept. 30,    Sept. 30,    Sept. 30,
Three months ended               2012         2011         2012         2011
----------------------------------------------------------------------------
Revenues from income                                                        
 producing properties    $ 11,195,642 $  6,157,707 $ 31,575,199 $ 16,695,709
Net income and                                                              
 comprehensive income       3,526,175    2,113,239   10,715,642    4,192,601
Net income per unit -                                                       
 basic & diluted                 0.16         0.27         0.59         0.54
NOI (1)                     7,576,746    4,137,945   20,714,126   10,802,497
NOI - same property (1)     3,935,186    3,820,901    8,892,514    8,772,970
FFO(1)                      3,749,640    1,262,428    9,686,097    3,602,159
FFO per unit(1)                  0.18         0.16         0.53         0.47
AFFO(1)                     3,265,885    1,098,450    8,648,584    3,168,978
AFFO per unit(1)                 0.15         0.14         0.48         0.41
Distributions(2)            3,433,006    1,243,624    8,867,778    3,722,820
Distributions per                                                           
 unit(2)                         0.16         0.16         0.48         0.48
Cash distributions(3)       3,200,629    1,162,701    8,405,749    3,526,056
Cash distributions per                                                      
 unit(3)                         0.15         0.15         0.46         0.46
Cash distribution payout                                                    
 ratio(4)                   85% / 98%   92% / 106%    87% / 97%   98% / 111%
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
                                         Sept. 30,     Dec. 31,    Sept. 30,
As at                                         2012         2011         2011
----------------------------------------------------------------------------
Total assets                          $442,496,388 $265,748,040 $256,486,723
Total debt(5)                          280,307,968  202,592,032  197,559,240
Total equity                           151,394,633   56,406,374   54,520,123
Weighted average units                                                      
 outstanding - basic                    18,181,355   14,306,130    7,740,415
Debt-to-gross book value                                                    
 including debentures(5)                     62.0%        73.0%        73.3%
Debt-to-gross book value                                                    
 excluding debentures(5)                     48.3%        62.9%        62.9%
Interest coverage                                                           
 ratio(6)                                     2.08         1.70         1.65
Debt service coverage                                                       
 ratio(6)                                     1.44         1.26         1.26
Weighted average                                                            
 interest rate(7)                            4.64%        4.95%        5.42%
Portfolio occupancy                          96.4%        98.0%        98.2%
----------------------------------------------------------------------------
----------------------------------------------------------------------------

1.  Net operating income or "NOI", funds from operations or "FFO", and
    adjusted funds from operations or "AFFO" are non-IFRS financial measures
    widely used in the real estate industry. See "Part II - Performance
    Measurement" for further details and advisories. 
2.  Represents distributions to unitholders on an accrual basis.
    Distributions are payable as at the end of the period in which they are
    declared by the Board of Trustees, and are paid on or around the 15thday
    of the following month. Distributions per unit exclude the 5% bonus
    units given to participants in the Distribution Reinvestment and
    Optional Unit Purchase Plan. 
3.  Represents distributions on a cash basis, and as such, excludes the non-
    cash distributions of units issued under the Distribution Reinvestment
    and Optional Unit Purchase Plan. 
4.  Cash distributions as a percentage of funds from operations/adjusted
    funds from operations. 
5.  See calculation under "Debt-to-Gross Book Value" in "Part III - Results
    of Operations." 
6.  Calculated on a rolling four-quarter basis. See definition under
    "Mortgages and Other Financing" in "Part III - Results of Operations". 
7.  Represents the weighted average effective interest rate for secured debt
    excluding debentures and credit facilities.

For the complete Financial Statements and Management's Discussion and Analysis for the period, please visit www.sedar.com or www.partnersreit.com.

About Partners REIT

Partners REIT is a growth-oriented real estate investment trust, which currently owns (directly or indirectly) 30 retail properties located in Ontario, Quebec, Manitoba, Alberta and British Columbia aggregating approximately 2.2 million square feet of leasable space. Partners REIT focuses on expanding and managing a portfolio of retail and mixed-use community and neighbourhood shopping centres located in both primary and secondary markets across Canada.

Certain statements included in this press release constitute forward-looking statements, including, but not limited to, those identified by the expressions "expect," "will" and similar expressions to the extent they relate to Partners REIT. The forward-looking statements are not historical facts but reflect Partners REIT's current expectations regarding future results or events. These forward looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations, including the timing of the offering, success of the offering, listing of the units, use of proceeds of the Offering, access to capital, regulatory approvals, intended acquisitions and general economic and industry conditions. Although Partners REIT believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and, accordingly, readers are cautioned not to place undue reliance on such statements due to the inherent uncertainty therein.

Contacts:
Partners Real Estate Investment Trust
Patrick Miniutti
President
(250) 940-5500
www.partnersreit.com

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

@ThingsExpo Stories
Almost everyone sees the potential of Internet of Things but how can businesses truly unlock that potential. The key will be in the ability to discover business insight in the midst of an ocean of Big Data generated from billions of embedded devices via Systems of Discover. Businesses will also need to ensure that they can sustain that insight by leveraging the cloud for global reach, scale and elasticity.
DevOps Summit 2015 New York, 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 it is now accepting Keynote Proposals. 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 software that is obsolete at launch. DevOps may be disruptive, but it is essential.
SYS-CON Media announced that Cisco, a worldwide leader in IT that helps companies seize the opportunities of tomorrow, has launched a new ad campaign in Cloud Computing Journal. The ad campaign, a webcast titled 'Is Your Data Center Ready for the Application Economy?', focuses on the latest data center networking technologies, including SDN or ACI, and how customers are using SDN and ACI in their organizations to achieve business agility. The Cisco webcast is available on-demand.
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 now open. The Internet of Things (IoT) is the biggest idea since the creation of the Worldwide Web more than 20 years ago.
"BSQUARE is in the business of selling software solutions for smart connected devices. It's obvious that IoT has moved from being a technology to being a fundamental part of business, and in the last 18 months people have said let's figure out how to do it and let's put some focus on it, " explained Dave Wagstaff, VP & Chief Architect, at BSQUARE Corporation, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
“The age of the Internet of Things is upon us,” stated Thomas Svensson, senior vice-president and general manager EMEA, ThingWorx, “and working with forward-thinking companies, such as Elisa, enables us to deploy our leading technology so that customers can profit from complete, end-to-end solutions.” ThingWorx, a PTC® (Nasdaq: PTC) business and Internet of Things (IoT) platform provider, announced on Monday that Elisa, Finnish provider of mobile and fixed broadband subscriptions, will deploy ThingWorx® platform technology to enable a new Elisa IoT service in Finland and Estonia.
Advanced Persistent Threats (APTs) are increasing at an unprecedented rate. The threat landscape of today is drastically different than just a few years ago. Attacks are much more organized and sophisticated. They are harder to detect and even harder to anticipate. In the foreseeable future it's going to get a whole lot harder. Everything you know today will change. Keeping up with this changing landscape is already a daunting task. Your organization needs to use the latest tools, methods and expertise to guard against those threats. But will that be enough? In the foreseeable future attacks w...
As enterprises move to all-IP networks and cloud-based applications, communications service providers (CSPs) – facing increased competition from over-the-top providers delivering content via the Internet and independently of CSPs – must be able to offer seamless cloud-based communication and collaboration solutions that can scale for small, midsize, and large enterprises, as well as public sector organizations, in order to keep and grow market share. The latest version of Oracle Communications Unified Communications Suite gives CSPs the capability to do just that. In addition, its integration ...
Building low-cost wearable devices can enhance the quality of our lives. In his session at Internet of @ThingsExpo, Sai Yamanoor, Embedded Software Engineer at Altschool, provided an example of putting together a small keychain within a $50 budget that educates the user about the air quality in their surroundings. He also provided examples such as building a wearable device that provides transit or recreational information. He then reviewed the resources available to build wearable devices at home including open source hardware, the raw materials required and the options available to power s...
Today’s enterprise is being driven by disruptive competitive and human capital requirements to provide enterprise application access through not only desktops, but also mobile devices. To retrofit existing programs across all these devices using traditional programming methods is very costly and time consuming – often prohibitively so. In his session at @ThingsExpo, Jesse Shiah, CEO, President, and Co-Founder of AgilePoint Inc., discussed how you can create applications that run on all mobile devices as well as laptops and desktops using a visual drag-and-drop application – and eForms-buildi...
From telemedicine to smart cars, digital homes and industrial monitoring, the explosive growth of IoT has created exciting new business opportunities for real time calls and messaging. In his session at @ThingsExpo, Ivelin Ivanov, CEO and Co-Founder of Telestax, shared some of the new revenue sources that IoT created for Restcomm – the open source telephony platform from Telestax. Ivelin Ivanov is a technology entrepreneur who founded Mobicents, an Open Source VoIP Platform, to help create, deploy, and manage applications integrating voice, video and data. He is the co-founder of TeleStax, a...

ARMONK, N.Y., Nov. 20, 2014 /PRNewswire/ --  IBM (NYSE: IBM) today announced that it is bringing a greater level of control, security and flexibility to cloud-based application development and delivery with a single-tenant version of Bluemix, IBM's platform-as-a-service. The new platform enables developers to build ap...

We certainly live in interesting technological times. And no more interesting than the current competing IoT standards for connectivity. Various standards bodies, approaches, and ecosystems are vying for mindshare and positioning for a competitive edge. It is clear that when the dust settles, we will have new protocols, evolved protocols, that will change the way we interact with devices and infrastructure. We will also have evolved web protocols, like HTTP/2, that will be changing the very core of our infrastructures. At the same time, we have old approaches made new again like micro-services...
Disruptive macro trends in technology are impacting and dramatically changing the "art of the possible" relative to supply chain management practices through the innovative use of IoT, cloud, machine learning and Big Data to enable connected ecosystems of engagement. Enterprise informatics can now move beyond point solutions that merely monitor the past and implement integrated enterprise fabrics that enable end-to-end supply chain visibility to improve customer service delivery and optimize supplier management. Learn about enterprise architecture strategies for designing connected systems tha...
SYS-CON Events announced today that CodeFutures, a leading supplier of database performance tools, has been named a “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. CodeFutures is an independent software vendor focused on providing tools that deliver database performance tools that increase productivity during database development and increase database performance and scalability during production.
The Internet of Things is a misnomer. That implies that everything is on the Internet, and that simply should not be - especially for things that are blurring the line between medical devices that stimulate like a pacemaker and quantified self-sensors like a pedometer or pulse tracker. The mesh of things that we manage must be segmented into zones of trust for sensing data, transmitting data, receiving command and control administrative changes, and peer-to-peer mesh messaging. In his session at @ThingsExpo, Ryan Bagnulo, Solution Architect / Software Engineer at SOA Software, focused on desi...
"For over 25 years we have been working with a lot of enterprise customers and we have seen how companies create applications. And now that we have moved to cloud computing, mobile, social and the Internet of Things, we see that the market needs a new way of creating applications," stated Jesse Shiah, CEO, President and Co-Founder of AgilePoint Inc., in this SYS-CON.tv interview at 15th Cloud Expo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Recurring revenue models are great for driving new business in every market sector, but they are complex and need to be effectively managed to maximize profits. How you handle the range of options for pricing, co-terming and proration will ultimately determine the fate of your bottom line. In his session at 15th Cloud Expo, Brendan O'Brien, Co-founder at Aria Systems, session examined: How time impacts recurring revenue How to effectively handle customer plan changes The range of pricing and packaging options to consider
Things are being built upon cloud foundations to transform organizations. This CEO Power Panel at 15th Cloud Expo, moderated by Roger Strukhoff, Cloud Expo and @ThingsExpo conference chair, addressed the big issues involving these technologies and, more important, the results they will achieve. Rodney Rogers, chairman and CEO of Virtustream; Brendan O'Brien, co-founder of Aria Systems, Bart Copeland, president and CEO of ActiveState Software; Jim Cowie, chief scientist at Dyn; Dave Wagstaff, VP and chief architect at BSQUARE Corporation; Seth Proctor, CTO of NuoDB, Inc.; and Andris Gailitis, C...
The Industrial Internet revolution is now underway, enabled by connected machines and billions of devices that communicate and collaborate. The massive amounts of Big Data requiring real-time analysis is flooding legacy IT systems and giving way to cloud environments that can handle the unpredictable workloads. Yet many barriers remain until we can fully realize the opportunities and benefits from the convergence of machines and devices with Big Data and the cloud, including interoperability, data security and privacy.