BPO Properties Reports 2004 Results.TORONTO -- BPO BPO Business Process Outsourcing BPO Benevolent & Protective Order (of Elks of the USA) BPO Benzoyl Peroxide BPO Business Process Optimization BPO Broker Price Opinions BPO Buffalo Philharmonic Orchestra Properties Ltd. (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :BPP (Bits Per Pixel) See bit depth. bpp - bits per pixel ) today announced financial results for the year ended December 31, 2004. RESULTS OF OPERATIONS
Three Months Ended Year Ended
December 31 December 31
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2004 2003 2004 2003
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Funds from operations
- $ (millions) $ 24.8 $ 24.3 $ 102.2 $ 132.5
- per share 0.77 0.74 3.20 4.20
Net income
- $ (millions) 15.5 27.5 63.0 93.9
- per share 0.45 0.85 1.83 2.84
For the year ended December 31, 2004, BPO Properties' funds from operations Funds From Operations (FFO) Used by real estate and other investment trusts to define the cash flow from trust operations; earnings with depreciation and amortization added back. and gains was $3.20 per share compared with $4.20 per share during 2003. Net income was $1.83 per share compared with $2.84 per share during 2003. For the three months ended December 31, 2004, BPO Properties' funds from operations was $0.77 per share compared with $0.74 per share during the same period in 2003. Net income was $0.45 per share compared with $0.85 per share during the same period in 2003. These changes are primarily attributable to lower interest income after the payment of the special common share dividend totaling $428 million in the first quarter of 2004. "Our performance during 2004 demonstrates that our strategy of owning premier office properties in the downtown core
The Downtown Core is a 266-hectare urban planning area in the south of the city-state of Singapore. of select Canadian cities with long-term leases to high-quality tenants has enabled us to deliver on our financial and operating targets," said BPO Properties President & CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Tom Farley. "In addition, we were pleased to have funded a special dividend from the company's cash resources in 2004." MAJOR 2004 INITIATIVES BPO Properties creates value through pro-active leasing and asset strategies, including the re-leasing of space at higher market rents, opportunistic opportunistic /op·por·tu·nis·tic/ (op?er-tldbomacn-is´tik) 1. denoting a microorganism which does not ordinarily cause disease but becomes pathogenic under certain circumstances. 2. lease take-backs, and the subsequent disposition of fully-valued assets to investors looking for Looking for In the context of general equities, this describing a buy interest in which a dealer is asked to offer stock, often involving a capital commitment. Antithesis of in touch with. consistent yields. In 2004, the company successfully undertook a number of initiatives to position the company for continued growth: - Paid a special common share dividend of $15 per share, totaling approximately $428 million. - Sold the company's 20% interest in Gulf Canada Square
Canada Square is a public square at Canary Wharf, on the Isle of Dogs in London's Docklands. in Calgary, based on a property valuation of $222 million, recording a gain of $6 million. The sale occurred following the successful renewal of a 400,000 square foot lease with Canadian Pacific Railway Canadian Pacific Railway, transcontinental transportation system in Canada and extending into the United States, privately owned and operated. The construction of a railroad crossing the continent in Canadian territory was one of the conditions on which British Company and marked the completion of the company's strategy to invest, reposition and monetize Monetize 1. To convert into money. 2. To convert from securities into currency that can be used to purchase goods and services. Notes: For example, you'll often hear Internet marketers talk about "monetizing website visitors. unsurfaced value from this asset. This was accomplished within a 14-month time frame. - Acquired a $35.9 million, seven-year, 11.2% fixed rate mezzanine mez·za·nine n. 1. A partial story between two main stories of a building. 2. The lowest balcony in a theater or the first few rows of that balcony. debt investment for the Bank of America Center There are two Bank of America Centers
- Increased the company's investment in high-grade bonds High-grade bond A bond with Triple-A or Double-A rating in Standard & Poor's, or Moody's rating system. . This balance represents a significant advantage to the company, as it has substantial capital resources to react quickly to potential investment opportunities. - Instituted a small shareholder selling and purchase program available for shareholders holding 99 or fewer common shares of BPO Properties Ltd. as of November 8, 2004. The Program is voluntary and offers eligible shareholders resident in Canada the opportunity to sell all, but not less than all, of their holdings or to purchase a sufficient number of shares so that they hold at least 100 shares. Participating shareholders will not incur To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. commission charges; however, shareholders whose shares are held by a nominee nominee n. 1) a person or entity who is requested or named to act for another, such as an agent or trustee. 2) a potential successor to another's rights under a contract. may be required to pay a fee to their nominee. The offer is open to both registered and beneficial holders resident in Canada whose shares are held by a broker, bank, trust company or other nominee. Participating organizations are requested to contact clients eligible to participate and provide them with the relevant information. The Program will terminate March 15, 2005 at 4:00 p.m. (Toronto time). Details of the Program may be obtained by contacting CIBC CIBC Canadian Imperial Bank of Commerce CIBC Centres Interinstitutionnels de Bilan de Compétences CIBC Commonwealth Institute of Biological Control (Trinidad) CIBC Commercial International Brokerage Company Mellon at 1-800-387-0825. - Renewed the normal course issuer bid, permitting the company to acquire up to 342,830 common shares during the period from September 15, 2004 to September 14, 2005. OPERATIONS REVIEW During 2004, BPO Properties strengthened the cashflows achieved from its operating business while continuing its pro-active leasing strategy, addressing roll-over exposures in the coming years. The portfolio was 96.1% occupied at year-end compared to a Canadian national average of 89.4%. BPO Properties pro-actively leased 1.3 million square feet of space during the year, approximately 4.5 times the amount contractually expiring ex·pire v. ex·pired, ex·pir·ing, ex·pires v.intr. 1. To come to an end; terminate: My membership in the club has expired. 2. . Leasing highlights from the fourth quarter include: 281,000 square feet in Toronto - a seven year lease renewal with the Department of Justice for 144,000 square feet at Exchange Tower; - a five year lease renewal with the Attorney General for 62,000 square feet at Atrium on Bay The Atrium on Bay is a retail and office complex on the former site of the Ford Hotel on Dundas Street West, extending from Yonge Street to Bay Street. The 14-floor building was built in 1981 with two floors of retail stores. ; - a new eight-year lease with the Vengrowth Investment Fund for 31,000 square feet at 105 Adelaide Street West; 127,000 square feet in Calgary - a five-year lease renewal with Penn West Petroleum Ltd. for 71,000 square feet at Fifth Avenue Place; - a new five-year lease with Shiningbank Energy for 39,000 square fee at Petro-Canada Centre The Petro-Canada Centre is a 1,945,000 square foot (181,000 m²) project composed of two granite and reflective glass-clad office towers of 32 floors and 53 floors, situated in the office core of downtown Calgary, Alberta. ; 49,000 square feet in Vancouver - a nine-year lease renewal with Lang Michner for 31,000 square feet at Royal Centre. - a ten-year lease with Cundill Management for 7,000 square feet at Royal Centre Looking forward, only 4.5% of BPO Properties' leases expire expire /ex·pire/ (ek-spi´er) 1. to exhale. 2. to die. ex·pire v. 1. To breathe one's last breath; die. 2. To exhale. each year on average over the next five years, which should enable the company to maintain its consistent performance. OUTLOOK "Our achievements in 2004, including signing the largest lease in Canada, reflect our pro-active approach to leasing and the high quality of our properties. As leases expire in the near term, we expect to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. positive market conditions to increase occupancy and in-place rental rates throughout the portfolio. Our long-term lease profile, in conjunction with a strong balance sheet and significant financial flexibility, provide us with a solid foundation for the future," Farley concluded. Dividend Declaration The Board of Directors of BPO Properties declared a quarterly common share dividend of $0.15 per share, payable March 31, 2005 to shareholders of record at the close of business on March 1, 2005. The Board of Directors also declared dividends declared dividend A dividend authorized by a firm's board of directors. At the time a dividend is declared, the firm creates a liability for the dividend's payment. on series G, J and M preferred shares Preferred shares Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders. See: Preferred stock. , payable May 14, 2005, record date of April 30, 2005, for the period February 14, 2005 to May 13, 2005. The dividend per preferred share is to be computed in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with the terms of the shares. Conference Call BPO Properties' year-end conference call can be accessed by teleconference on Thursday, February 17, 2005 at 10:00 a.m. E.T. at 800-766-6630 or 416-695-5261. The archived teleconference may be accessed by dialing 800-293-6575 or 416-641-2135 with access code 2123 through March 17, 2005. The conference call can also be accessed by Web cast on the BPO Properties Web site at www.bpoproperties.com. Supplemental Information Investors, analysts and other interested parties can access BPO Properties' Supplemental Information Package on BPO Properties' Web site under the Investor Information/Financial Reports section. This additional financial information should be read in conjunction with this press release. BPO Properties Profile BPO Properties Ltd. is a Canadian company that invests in real estate, focusing on the ownership and value enhancement of premier office properties. The current property portfolio is comprised of interests in 17 commercial properties and development sites totaling 14 million square feet, including landmark properties such as the Exchange Tower, home of the Toronto Stock Exchange Toronto Stock Exchange (TSE) Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options. , and Bankers Hall Bankers Hall is a building complex located in downtown Calgary, Alberta, which includes twin 52-storey office towers (197 metres high), designed by the architectural firm Cohos Evamy in postmodern architectural style. in Calgary. BPO Properties' common shares trade on the TSX under the symbol BPP. Further information about the company can be found at www.bpoproperties.com. Contact Investor relations Investor relations The process by which the corporation communicates with its investors. and media inquiries should be directed to Melissa Coley coley Noun Brit an edible fish with white or grey flesh [perhaps from coalfish] , Vice President, Investor Relations and Communications at (416) 359-8593. Inquiries regarding financial results should be directed to Craig Laurie, Senior Vice President and Chief Financial Officer, at (416) 956-5170. Note: This press release contains "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " that are based on certain assumptions and reflect the company's current expectations. The words "believe," "expect," "anticipate," "intend," "estimate" and other expressions which are predictions of or indicate future events and trends and which do not relate to historical matters identify forward-looking statements. Reliance should not be placed on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the company to differ materially from anticipated future results, performance or achievement expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from those set forth in the forward-looking statements include general economic conditions, local real estate conditions, timely re-leasing of occupied square footage upon expiration EXPIRATION. Cessation; end. As, the expiration of, a lease, of a contract, or statute. 2. In general, the expiration of a contract puts an end to all the engagements of the parties, except to those which arise from the non- fulfillment of obligations created , interest rates, availability of equity and debt financing Debt Financing When a firm raises money for working capital or capital expenditures by selling bonds, bills, or notes to individual and/or institutional investors. In return for lending the money, the individuals or institutions become creditors and receive a promise to repay and other risks detailed from time to time in the documents filed by the company with the securities regulators in Canada. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. This press release makes reference to "funds from operations" on a total and per share basis. Management uses funds from operations as a key measure to evaluate performance. Shareholders are encouraged to consider both net income and funds from operations in assessing BPO Properties' results.
CONSOLIDATED BALANCE SHEET
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December 31 December 31
(Millions) 2004 2003
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Assets
Commercial properties $ 1,003.9 $ 1,039.7
Marketable securities and
other investments 377.9 349.6
Loans receivable 91.7 50.4
Future income taxes 49.2 59.5
Other assets 28.5 31.9
Cash and cash equivalents 11.2 491.1
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$ 1,562.4 $ 2,022.2
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Liabilities and
shareholders' equity
Commercial property debt $ 655.8 $ 703.5
Accounts payable and
other liabilities 45.6 64.7
Shareholders' equity 861.0 1,254.0
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$ 1,562.4 $ 2,022.2
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CONSOLIDATED STATEMENT OF INCOME
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For the 3 Months Ended For the Year Ended
(Millions, except December 31 December 31
per share amounts) 2004 2003 2004 2003
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Commercial Properties
Revenue $ 57.5 $ 53.5 $ 218.0 $ 216.4
Expenses 27.0 26.4 104.8 106.2
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Net operating income 30.5 27.1 113.2 110.2
Loans and investment
income 7.0 10.2 35.0 71.5
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37.5 37.3 148.2 181.7
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Expenses
Interest expense 10.8 11.0 43.9 43.7
Administrative expenses
and large corporation tax 1.9 2.0 8.1 9.1
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Income before the
following items 24.8 24.3 96.2 128.9
Gains on disposition of
properties - - 6.0 3.6
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Income before undernoted 24.8 24.3 102.2 132.5
Depreciation and
amortization 8.8 6.2 28.9 23.2
Future income taxes and
other non-cash items 0.5 (9.4) 10.3 15.4
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Net income $ 15.5 $ 27.5 $ 63.0 $ 93.9
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Net income per common
share $ 0.45 $ 0.85 $ 1.83 $ 2.84
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BPO Properties Ltd. (TSX:BPP) |
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