Boardwalk Equities Reports Strong Third Quarter Results: Record Quarter for Rental Operations.Business Editors CALGARY Calgary (kăl`gərē), city (1991 pop. 710,677), S Alta., Canada, at the confluence of the Bow and Elbow rivers. The largest city in Alberta and the fastest-growing major city in Canada, Calgary is a corporate, transportation, and financial , Alberta--(BUSINESS WIRE)--Nov. 15, 2001 Boardwalk Equities Inc. (NYSE NYSE See: New York Stock Exchange :BEI Bei (pā, bā), river, c.200 mi (320 km) long, formed by the union of two headstreams in the Nanling Mts., N Guangdong prov., S China. It flows S into the Xi River, E of Guangzhou, to form the Pearl River delta. )(TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). :BEI.)- is pleased to report a strong quarter of financial results for the third quarter of 2001, which was a record quarter for the Company's core rental operations. For the third quarter ended September September: see month. 30, 2001, the Company reported total revenues of $51.7 million, 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. ("FFO FFO See: Funds from operations ") of $14.9 million and FFO per share of $0.30. For the nine months ended September 30, 2001, the Company reported total revenues of $170.0 million, FFO of $45.9 million and FFO per share of $0.92. Effective December December: see month. 31, 2000, the Company changed its fiscal period end to December 31 from May 31. Due to this change, an identical period for comparative purposes is not available. For illustrative il·lus·tra·tive adj. Acting or serving as an illustration. il·lus  tra·tive·ly adv.Adj. 1. purposes only, where applicable, we have presented the Company's results for the three-month and nine-month periods ended August 31, 2000. Readers are cautioned that these results are not for identical comparable periods and that the real estate industry is subject to seasonal fluctuations that will affect straight comparisons of these amounts. Highlights of the Company's third quarter 2001 financial results include: -- Rental revenues of $51.5 million, an increase of 10% compared to $46.7 million for the three-month period ended August 31, 2000; -- Total revenues of $51.7 million, compared to $46.7 million for the three-month period ended August 31, 2000; -- Net operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. of $36.0 million, representing a 16% increase from $31.1 million for the three-month period ended August 31, 2000; -- FFO of $14.9 million, up 54% compared to $9.7 million for the three-month period ended August 31, 2000; -- FFO per share of $0.30 on a diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. basis, an increase of 58% from the $0.19 for the three-month period ended August 31, 2000; -- Net loss of $17.3 million, compared to a loss of $1.2 million for the three-month period ended August 31, 2000. A one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. write-down Write-Down Reducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. of $27.5 million ($18.0 million after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. ) on technology investments was recorded in the Company's third quarter, fiscal 2001; -- Loss per share of $0.34, compared to a loss of $0.02 per share for the three-month period ended August 31, 2000. In the current quarter, the write-down on technology investments amounted to $0.36 per share after-tax. Commenting on the Company's third quarter results, Sam Kolias Sam Kolias is the CEO of Boardwalk REIT (TSX: BEI.UN).[1] He and his brother Van Kolias, Senior VP of Quality Control of Boardwalk, are at #81 of the top 100 richest people in Canada as compiled by Canadian Business magazine for 2006. , President and Chief Executive Officer said, "We are pleased to report that our core real estate operations continue to show strong and improving results. The fundamentals for the multi-family rental sector remain healthy." Boardwalk's core rental operations posted record quarterly results, driven by continued improvement in its portfolio performance. The average vacancy VACANCY. A place which is empty. The term is principally applied to cases where an office is not filled. 2. By the constitution of the United States, the president has the power to fill up vacancies that may happen during the recess of the senate. rate across the Company's portfolio for the third quarter of 2001 was 4.6%, down from 6.2% in the second quarter. As of October October: see month. 2001, the vacancy rate had declined further to 4.0%. Average monthly rents realized in the nine-month period of 2001 were $658 per unit, up $40, or 6%, from $618 per unit for the nine months ended August 31, 2000. Management estimates that market rents for its properties at the end of September 2001 averaged $748, which compares to an average in-place rent per occupied oc·cu·py tr.v. oc·cu·pied, oc·cu·py·ing, oc·cu·pies 1. To fill up (time or space): a lecture that occupied three hours. 2. To dwell or reside in. 3. unit of $702. This indicates an estimated "loss-to-lease" on the portfolio of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $14.3 million on an annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. basis. The third quarter 2001 results include a small profit of $0.1 million derived de·rive v. de·rived, de·riv·ing, de·rives v.tr. 1. To obtain or receive from a source. 2. from the sale of excess land at one of the Company's Edmonton Edmonton (ĕd`məntən), city (1991 pop. 616,741), provincial capital, central Alta., Canada, on the North Saskatchewan River. The center of the largest metropolitan area in Alberta, Edmonton, known as the "Gateway to the North," is located properties. There were no operating profits Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. from asset sales in the comparable three-month period ended August 31, 2000. The Company completed the previously announced acquisition of two properties early in the third quarter totaling 531 units at a cost of just over $23.4 million before closing costs Closing Costs The numerous expenses (over and above the price of the property) that buyers and sellers normally incur to complete a real estate transaction. Costs incurred include loan origination fee, discount points, appraisal fee, title search, title insurance, survey, taxes, , or approximately $44,100 per unit. This brings the total units acquired year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. to 1,242. Subsequent to September 30, 2001, the Company has contracted to acquire 120 units at a purchase price of $7.0 million. The deal is scheduled to close in the fourth quarter of 2001. The Company's net income in the quarter was affected by a one-time write-down on technology investments of $27.5 million, or $18.0 million after-tax. The bulk of this write-down is associated with our Suite Systems subsidiary. In October, Management announced its decision to curtail cur·tail tr.v. cur·tailed, cur·tail·ing, cur·tails To cut short or reduce. See Synonyms at shorten. [Middle English curtailen, to restrict Suite Systems operations, and the expected write-down. Under the Company's normal course issuer bid, Boardwalk bought back a total of 49,700 shares in the third quarter of 2001 at an average price of $11.84. Subsequent to the end of the third quarter through to November November: see month. 14, 2001, Boardwalk acquired a further 242,900 shares at an average price of $11.16 per share. For the year-to-date and the current normal course issuer bid-to-date (which began March 1, 2001), Boardwalk has acquired a total of 293,100 shares at an average price of $11.28 per share. Same-Store Results Boardwalk continued to show solid improvement in its stabilized sta·bi·lize v. sta·bi·lized, sta·bi·liz·ing, sta·bi·liz·es v.tr. 1. To make stable or steadfast. 2. properties (defined as properties owned for over 24 months). A total of 22,549 units were classified as stabilized at September 30, 2001, representing 87% of Boardwalk's total portfolio. The table below compares the "same-store" results for the nine months ended September 30, 2001 to the nine months ended September 30, 2000.
Same-store portfolio - Nine months ended September 30, 2001
vs. nine months ended September 30, 2000
% of
Rental Rental Stabilized
Revenues Expenses NOI NOI
---------------------------------------------------------------------
Edmonton 9.56% -0.68% 14.23% 45%
Calgary 5.19% -5.37% 8.14% 26%
Other Alberta 9.42% -8.71% 14.13% 7%
Ontario 14.40% 6.53% 32.38% 7%
Saskatoon 8.51% 0.30% 5.60% 6%
Regina 3.33% 7.68% 1.30% 9%
---------------------------------------------------------------------
Total Stabilized 8.20% 0.88% 11.91% 100%
---------------------------------------------------------------------
On this basis, same-store results for the Company's stabilized portfolio for the nine-month period continued to show improved results with rental revenue growth of 8.2% and NOI NOI Net Operating Income NOI Notice of Intent NOI Nation of Islam NOI Notice of Inquiry NOI Neuro Orthopaedic Institute NOI New Organizing Institute NOI Notice of Interest NOI No Offense Intended NOI National Olympiad in Informatics growth of 11.9% versus the nine months ended September 31, 2000. Continued Balance Sheet Strength The Company maintained its strong financial position in the quarter. Boardwalk's mortgage debt totaled $1.06 billion as at September 30, 2001, up marginally from $1.03 billion at December 31, 2000. The weighted average interest rate of 6.24% as of September 30, 2001 is down slightly from 6.27% at December 31, 2001. The Company's liquidity remained strong, with cash and available credit facilities credit facilities npl → facilidades fpl de crédito credit facilities npl → facilités fpl de paiement credit facilities in excess of $46 million at the end of the third quarter. The Company's coverage ratios also remain strong, with an interest coverage ratio of 1.96 for the current nine-month period, excluding the one-time technology write-down, compared to 1.75 times in the comparative period last year. Outlook and Summary Commenting on the outlook for the Company, Mr. Kolias said, "Boardwalk remains well positioned to continue to show improved results. Despite the slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. in the economy, we are seeing continued solid performance in our portfolio. With our portfolio heavily weighted in strong geographic markets, we believe we can continue to deliver solid results driven by strong internal growth over the next several years." With respect to current "street" estimates, Rob Geremia, Vice President, Finance and Chief Financial Officer said, "We are comfortable that we can deliver results for the full year towards the upper end of current street estimates. We are expecting that FFO for 2001 will be between $0.92 and $0.96 per share excluding profits on asset sales, with guidance for total FFO for the year of between $1.09 and $1.19 per share." 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. This release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. The forward-looking statements are statements that involve risks and uncertainties, including, but not limited to, changes in the demand for apartment and town home rentals, the effects of economic conditions, the impact of competition and competitive pricing, the effects of the Company's accounting policies and other matters detailed in the Company's filings with Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. and United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. securities regulators available on SEDAR SEDAR System for Electronic Document Analysis and Retrieval SEDAR Southeast Data, Assessment, and Review in Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of and by request through the Securities and Exchange Commission in the United States, including matters set forth in the Company's Annual Report to Shareholders under the heading "Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial ". Because of these risks and uncertainties, the results, expectations, achievements, or performance described in this release may be different from those currently anticipated by the Company. Teleconference on Fiscal 2001 Third Quarter Financial Results We invite you to participate in the teleconference that will be held to discuss the fiscal 2001 third quarter financial results this morning at 11:15am EST EST electroshock therapy. EST abbr. electroshock therapy . Sam Kolias, President and C.E.O., Rob Geremia, Vice President, Finance and C.F.O., and Mike Hough Michael Lloyd Hough (born February 6, 1963 in Montreal, Quebec, Canada) is a former professional ice hockey player who played thirteen seasons in the National Hockey League from 1986-87 until 1998-99. , Senior Vice President, will speak to the results. Presentation materials will be made available on the INVESTOR section of our website (www.bwalk.com) prior to the call. Participation & Registration: Please RSVP (ReSerVation Protocol) A communications protocol that signals a router to reserve bandwidth for real time transmission. RSVP is designed to clear a path for audio and video traffic, eliminating annoying skips and hesitations. to Paul Moon Paul Moon (born 1968) is a New Zealand historian and a professor at the Auckland University of Technology. He is a prolific writer of New Zealand history and biography, specialising in the Treaty of Waitangi and the early period of Crown rule. (403) 508-6208 or by email to investor@bwalk.com. Teleconference: The telephone numbers for the conference are: (416) 641-6715 (within Toronto Toronto (tərŏn`tō), city (1998 est pop. 2,400,000), provincial capital, S Ont., Canada, on Lake Ontario. Toronto is the largest city in Canada and since the 1970s has been one of the fastest-changing cities in North America, experiencing ) or 1-800-379-4140 (outside Toronto). Webcast: Investors will be able to listen to the call and view our slide presentation over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the by visiting http://investor.bwalk.com at least 15 minutes prior to the start of the call. An information page will be provided for software needed and system requirements To be used efficiently, all computer software needs certain hardware components or other software resources to be present on a computer system. These pre-requisites are known as (computer) system requirements and are often used as a guideline as opposed to an absolute rule. . The live audiocast See streaming audio. will also be available at http://www.newswire.ca/webcast/pages/BoardwalkEquities20011115/. Replay: An audio recording of the teleconference will be available approximately one hour after the call until 11:59pm EST on November 22nd. You can access it by dialing (416) 626-4100 and using the following reservation A clause in a deed of real property whereby the grantor, one who transfers property, creates and retains for the grantor some right or interest in the estate granted, such as rent or an Easement ,a right of use over the land of another. number, 19892437. An audio archive (1) A file that contains one or more compressed files. Most archive formats are also capable of storing folders in order to reconstruct the file/folder relationship when decompressed. See archive formats. will also be available on our Investor site (http://investor.bwalk.com) two hours after the conference call until November 22, 2001. Corporate Profile Boardwalk Equities Inc. is Canada's largest owner/operator of multi-family rental properties. Boardwalk currently owns and operates in excess of 200 properties with over 25,800 units totaling over 21 million net rentable square feet. The Company's portfolio is concentrated in the provinces of Alberta Alberta (ălbûr`tə), province (2001 pop. 2,974,807), 255,285 sq mi (661,188 sq km), including 6,485 sq mi (16,796 sq km) of water surface, W Canada. , Saskatchewan Saskatchewan, province, Canada Saskatchewan (səskăch`əwən, –wän', săs'–), province (2001 pop. 978,933), 251,700 sq mi (651,903 sq km), W Canada. and Ontario Ontario, city, United States Ontario, city (1990 pop. 133,179), San Bernardino co., S Calif., near Los Angeles, in a region of vineyards; inc. 1891. . Boardwalk is headquartered in Calgary and its shares are listed on both the Toronto Stock Exchange Toronto Stock Exchange (TSE) Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options. and the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. and trade under the symbol BEI. The Company has a total market capitalization Total Market Capitalization The total market value of all of a firm's outstanding securities. of $1.6 billion. Additional information is available at Boardwalk's web site at www.bwalk.com. Recent investor information can be found on the Internet at http://investor.bwalk.com/.
Consolidated Balance Sheets - As at
(Thousands of dollars) September 30, 2001 December 31, 2000
(Unaudited) (Audited)
Assets
Revenue producing properties $ 1,378,958 $ 1,328,702
Properties held for development
and resale 6,537 6,692
Mortgages and accounts receivable 18,616 17,230
Other assets 15,804 14,637
Deferred financing costs 32,133 31,460
Technology (Note 4) 7,109 24,058
Cash and short-term investments 1,445 21,055
----------------- -----------------
$ 1,460,602 $ 1,443,834
----------------- -----------------
----------------- -----------------
Liabilities
Mortgages payable $ 1,064,480 $ 1,034,444
Accounts payable and accrued
liabilities 18,276 24,795
Refundable security deposits
and other 10,289 9,953
Capital lease obligations 8,929 8,404
Future income taxes (Note 5) 60,813 64,864
----------------- -----------------
$ 1,162,787 $ 1,142,460
----------------- -----------------
----------------- -----------------
Shareholders' equity
Share capital (Note 6) $ 262,364 $ 253,586
Retained earnings 35,451 47,788
----------------- -----------------
297,815 301,374
----------------- -----------------
$ 1,460,602 $ 1,443,834
----------------- -----------------
----------------- -----------------
Consolidated Statement of (Loss) Earnings
- For the three and nine months ended
(Thousands of dollars, except per share amounts) (Unaudited)
September 30 August 31 September 30 August 31
2001 2000 2001 2000
(9 Months) (9 Months) (3 Months) (3 Months)
Revenue
Rental income $ 151,804 $ 139,702 $ 51,490 $ 46,664
Sales - properties
held for development
and resale 18,244 21,044 232 -
-----------------------------------------------
$ 170,048 $ 160,746 $ 51,722 $ 46,664
-----------------------------------------------
Expenses
Revenue producing
properties
Operating expenses $ 17,242 $ 17,650 $ 5,154 $ 6,359
Utilities 21,239 16,886 5,428 4,497
Utility rebate (4,060) - (327) -
Property taxes 14,883 14,041 5,205 4,716
Cost of sales -
properties held for
development and
resale 10,622 16,827 121 -
Administration 11,549 12,607 3,720 4,004
Financing costs 50,311 47,171 16,773 16,633
Amortization (Note 3) 38,611 29,208 13,329 11,179
-----------------------------------------------
$ 160,397 $ 154,390 $ 49,403 $ 47,388
-----------------------------------------------
Operating earnings
(loss) before the
following $ 9,651 $ 6,356 $ 2,319 $ (724)
Provision for loss
on technology
investments (Note 4) 27,515 - 27,515 -
-----------------------------------------------
Operating (loss)
earnings before
income taxes $ (17,864) $ 6,356 $ (25,196) $ (724)
Large corporations
taxes 2,333 2,343 755 732
Future income taxes
(Note 5) (10,689) 586 (8,672) (306)
-----------------------------------------------
Net (loss) earnings
for the period $ (9,508) $ 3,427 $ (17,279) $ (1,150)
-----------------------------------------------
-----------------------------------------------
Net (loss) earnings
per share (Note 7)
Basic $ (0.19) $ 0.07 $ (0.34) $ (0.02)
Diluted $ (0.19) $ 0.07 $ (0.34) $ (0.02)
-----------------------------------------------
-----------------------------------------------
Consolidated Statement of Retained Earnings
- For the nine months ended
(Thousands of dollars, except per share amounts) (Unaudited)
September August
2001 2000
(9 Months) (9 Months)
Retained earnings, as previously stated
Adjustment for the retroactive adoption of
future income taxes accounting standard $ 47,788 $ 32,726
- (1,500)
-------------------------
Retained earnings, beginning of period
as restated $ 47,788 $ 31,226
Net (loss) earnings $ (9,508) $ 3,427
Dividends paid (2,496) -
Premium on share repurchases (333) (3,462)
-------------------------
Retained earnings, end of period $ 35,451 $ 31,191
-------------------------
-------------------------
Consolidated Statement of Cash Flows
- For the three and nine months ended
(Thousands of dollars, except per share amounts) (Unaudited)
Sept 30, Aug 31, Sept 30, Aug 31,
2001 2000 2001 2000
(9 months) (9 months) (3 months) (3 months)
(restated (restated
Note 2) Note 2)
Cash flow obtained from
(applied to):
Operating activities
Net (loss) earnings $ (9,508) $ 3,427 $ (17,279) $ (1,150)
Future income taxes (10,689) 586 (8,672) (306)
Amortization 38,611 29,208 13,329 11,179
Provision for loss on
technology investments
(Note 4) 27,515 - 27,515 -
-------------------------------------------
Funds from operations 45,929 33,221 14,893 9,723
Net change in operating
working capital (8,637) 17,443 1,936 (1,630)
Net change in properties
held for development
and resale 9,657 3,228 (87) (259)
-------------------------------------------
Total operating cash
flows 46,949 53,892 16,742 7,834
-------------------------------------------
Financing activities
Issue of common shares
(net of issue costs) 1,941 3,104 486 88
Stock repurchase program (613) (6,885) (608) -
Dividends paid (2,496) - - -
Financing of revenue
producing properties 96,583 113,905 25,146 42,947
Repayment of debt on
revenue producing
properties (96,188) (63,701) (25,066) (24,416)
Capital lease payments (1,023) - (79) -
Deferred financing costs (1,542) (1,950) 95 (1,677)
-------------------------------------------
(3,338) 44,473 (26) 16,942
-------------------------------------------
Investing activities
Purchases of revenue
producing properties
(Note 8) (14,542) (33,836) (7,804) (7,313)
Project improvements to
revenue producing
properties (39,349) (51,133) (10,667) (15,373)
Technology (9,330) (8,825) (4,486) (1,384)
-------------------------------------------
(63,221) (93,794) (22,957) (24,070)
-------------------------------------------
(Decrease) increase in
cash balance during
the period (19,610) 4,571 (6,241) 706
Cash and cash equivalents
(indebtedness),
beginning of period 21,055 (2,730) 7,686 1,135
-------------------------------------------
Cash and cash equivalents,
end of period $ 1,445 $ 1,841 $ 1,445 $ 1,841
-------------------------------------------
-------------------------------------------
Funds from operations
per share
Basic $ 0.92 $ 0.67 $ 0.30 $ 0.20
Diluted $ 0.91 $ 0.66 $ 0.30 $ 0.19
-------------------------------------------
Taxes Paid $ 2,670 $ 2,414 $ 846 $ 1,186
-------------------------------------------
-------------------------------------------
Interest Paid $ 48,833 $ 46,223 $ 16,539 $ 16,047
-------------------------------------------
-------------------------------------------
Notes to the Consolidated Financial Statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge For the three months and nine months ended September 30, 2001 Note 1 - Basis of Presentation These unaudited interim consolidated financial statements have been prepared 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 Canadian generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting ("GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ") and are consistent with those used in the audited consolidated financial statements as at and for the seven months ended December 31, 2000, except for the adoption of a new Canadian New Canadian Noun Canad a recent immigrant to Canada Institute of Public and Private Real Estate Companies ("CIPPREC CIPPREC Canadian Institute of Public and Private Real Estate Companies ") requirement. The new standard requires the use of a funds from operations ("FFO") calculation, versus the traditional cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses calculation. As a result of this change, the Corporation will now calculate funds from operations per share instead of cash flow per share. The interim financial statements should be read in conjunction with the audited financial statements. As a result of the Corporation changing its year end from May 31 to December 31, comparative figures for the quarter are August 31, 2000. Due to seasonality, the operating results for the three months and nine months ended September 30, 2001 are not necessarily indicative indicative: see mood. of the results that may be expected for the full year ended December 31, 2001. Note 2 - Changes in Accounting Policy Effective June June: see month. 1, 2000, the Corporation retroactively ret·ro·ac·tive adj. Influencing or applying to a period prior to enactment: a retroactive pay increase. [French rétroactif, from Latin adopted the new CICA CICA Competition In Contracting Act of 1984 (USA) CICA Canadian Institute of Chartered Accountants CICA Competition In Contracting Act CICA Criminal Injuries Compensation Authority (UK) Handbook
This article is about reference works. For the subnotebook computer, see .
An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of and funds from operations per share are calculated using the "treasury stock" method, replacing the previous method of "imputed Attributed vicariously. In the legal sense, the term imputed is used to describe an action, fact, or quality, the knowledge of which is charged to an individual based upon the actions of another for whom the individual is responsible rather than on the individual's earnings per share". There was no effect on diluted earnings per share and diluted funds from operations per share for the three months and nine months ended August 31, 2000. Note 3 - Amortization of Capital Items During the nine month comparative period ending August 31, 2000, the Corporation revised the amortization of project improvements to more closely reflect their estimated remaining useful lives. The revision was applied for the entire 2000 fiscal year ended May 31, 2000 and as such a period reconciliation was required for the first six months of the nine month comparative period. This resulted in the reduced amortization charge of $29.2 million for the nine months ended August 31, 2000 versus $38.6 million for the present period. Note 4 - Provision for loss on technology investments During the third quarter ended September 30, 2001, the Corporation provided for a loss on technology investments of $27.5 million due to the following investments: In the third quarter of 2001, the Corporation decided to cease its telecommunication telecommunication Communication between parties at a distance from one another. Modern telecommunication systems—capable of transmitting telephone, fax, data, radio, or television signals—can transmit large volumes of information over long distances. initiative subsequent to a process review. This review highlighted low returns on investment capital when compared to core real estate operations, the high cost of capital given current market conditions and the conclusion that the Corporation would be unable to reach partnership agreements for rights of way or access rights in target markets in the near future. On October 18, 2001, the Corporation formally announced the ceasing of the initiative. A provision of $26.7 million before tax ($17.2 million net of tax) has been recorded in the consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: statement of loss for the period ended September 30, 2001. This provision represents the write-down of capital assets capital assets n. equipment, property, and funds owned by a business. (See: capital, capital account) and estimated closure costs. Included in accounts payable at September 30, 2001 is $3.1 million in outstanding commitments reflecting the amount of cost necessary to cease the initiative. In addition, the Corporation ceased its investment in HomeXpress and as a result a loss of $800,000 was recorded in the quarter. The technology balance remaining at September 30, 2001 reflects net book values of technology anticipated in the ongoing operations of the Corporation including hardware, software and software development, system installations and other related costs.
Note 5 - Future income taxes
The recovery of income taxes is computed as follows (thousands):
Nine months ended Nine months ended
September 30, 2001 August 31, 2000
------------------ -----------------
Tax expense based on expected
rate of 36% (2000 - 44%) $ (6,431) $ 2,772
Adjustment for change in
effective tax rate (3,279) (1,629)
Non-taxable portion of capital
gains and other (979) (557)
------------------ -----------------
$ (10,689) $ 586
------------------ -----------------
The future income tax liability is calculated as follows (thousands):
As at Sept. 30, 2001 Dec. 31, 2000
------------------ -----------------
Tax assets related to operating
losses $ 58,806 $ 49,992
Tax liabilities related to
differences in tax and book
basis (119,619) (114,856)
------------------ -----------------
Future income tax liability $ (60,813) $ (64,864)
------------------ -----------------
Note 6 - Share capital
(a) Share capital September 30, 2001 December 31, 2000
Number Amount Number Amount
------ ------ ------ ------
Common Shares outstanding
(thousands) 50,217 $ 262,364 49,259 $ 253,586
(b) Stock options
The Corporation has a stock option plan that provides for the granting to directors, officers and associates of the Corporation options to purchase up to 7,795,822 (December 31, 2000 - 7,795,822) common shares. As at September 30, 2001, there are a total of 3,721,539 (December 31, 2000 - 4,399,288) options outstanding to directors, officers and associates. The exercise prices range from $9.11 to $22.92 (December 31, 2000 - $1.50 to $22.92). These options 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. up to March 27, 2011. All options are issued at market prices.
September 30, 2001 December 31, 2000
----------------------------------------
Options Options
Weighted-Average Weighted-Average
Exercise Price Exercise Price
Outstanding at
beginning of period 4,399,288 $12.37 4,043,402 $12.71
Granted 205,000 10.48 765,575 11.85
Exercised (355,482) 5.44 (41,357) 6.08
Forfeited (527,267) 14.50 (368,332) 13.41
----------------------------------------
Outstanding at end of
period 3,721,539 $12.62 4,399,288 $12.37
----------------------------------------
----------------------------------------
Options exercisable at period end
The following table summarized information about the options
outstanding at September 30, 2001:
Options Outstanding Options Exercisable
---------------------------------------------------------------------
Weighted Weighted Weighted
Range of Average Average Average
Exercise Number Contractual Exercise Number Exercise
Prices Outstanding Life Price Exercisable Price
$9.01 to $11.00 960,875 7.56 $ 9.54 836,620 $ 9.51
$11.01 to $13.00 1,743,800 7.42 11.91 1,013,040 11.61
$13.01 to $15.00 295,764 6.88 14.37 85,053 14.43
$15.01 to $17.00 421,400 6.38 16.08 176,560 16.13
$17.01 to $19.00 93,700 1.45 17.92 65,275 17.98
$19.01 to $21.00 128,000 1.39 20.12 96,000 20.12
$21.01 to $23.00 78,000 1.59 22.53 58,500 22.53
-------------------------------- -------------------
3,721,539 6.82 $12.62 2,331,048 $12.10
-------------------------------- -------------------
-------------------------------- -------------------
Note 7 - Per share calculations The following table sets forth the computation Computation is a general term for any type of information processing that can be represented mathematically. This includes phenomena ranging from simple calculations to human thinking. of basic and diluted earnings per share with respect to (loss) earnings (thousands except per share amounts).
September 30, August 31, September 30, August 31,
2001 2000 2001 2000
(9 months) (9 months) (3 months) (3 months)
-------------------------------------------------------
Net (loss)
earnings $ (9,508) $ 3,427 $ (17,279) $ (1,150)
-------------------------------------------------------
-------------------------------------------------------
Funds from
operations $ 45,929 $ 33,221 $ 14,893 $ 9,723
-------------------------------------------------------
-------------------------------------------------------
Denominator for
basic
earnings per
share -
weighted
average shares 50,038 49,718 50,204 49,816
Effect of
dilutive
stock options 190 439 267 501
-------------------------------------------------------
Denominator for
diluted
earnings per
share
adjusted for
weighted
average
shares and
assumed
conversion 50,228 50,157 50,471 50,317
-------------------------------------------------------
Basic (loss)
earnings per
share $ (0.19) $ 0.07 $ (0.34) $ (0.02)
Diluted (loss)
earnings per
share $ (0.19) $ 0.07 $ (0.34) $ (0.02)
Basic funds
from
operations
per share $ 0.92 $ 0.67 $ 0.30 $ 0.20
Diluted funds
from
operations
per share $ 0.91 $ 0.66 $ 0.30 $ 0.19
Note 8 - Purchases of revenue producing properties
September 30, August 31, September 30, August 31,
2001 2000 2001 2000
(9 months) (9 months) (3 months) (3 months)
-------------------------------------------------------
Cash $ 14,542 $ 33,836 $ 7,804 $ 7,313
Debt assumed 29,641 35,880 15,586 3,848
Shares issued 7,116 nil nil nil
-------------------------------------------------------
Total purchase
price $ 51,299 $ 69,716 $ 23,390 $ 11,161
-------------------------------------------------------
-------------------------------------------------------
Number of units 1,242 1,306 531 241
-------------------------------------------------------
-------------------------------------------------------
Note 9 - Commitments As disclosed dis·close tr.v. dis·closed, dis·clos·ing, dis·clos·es 1. To expose to view, as by removing a cover; uncover. 2. To make known (something heretofore kept secret). in the June 30, 2001 quarterly report, the Corporation has entered into a one year supply arrangement with a natural gas utility company to supply the Corporation with 80% of its natural gas requirements in Alberta for the 12 month period ending April 30, 2002. The agreement provides that the gas utility company supplies the commodity at $7.90 per gigajoule. The remaining 20% supply for November 2001 to March 2002 has been contracted at $6.60 per gigajoule. As disclosed in the December 31, 2000 annual report, the Corporation has entered into long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. supply arrangements with two utility companies to supply the Corporation with its electrical power needs for Alberta for the next three to five years at a blended rate of approximately $0.07/kwh. These agreements provide that the Corporation purchase its power for all properties under contract for the upcoming years based on an approximation approximation /ap·prox·i·ma·tion/ (ah-prok?si-ma´shun) 1. the act or process of bringing into proximity or apposition. 2. a numerical value of limited accuracy. of the current year's demand levels. Note 10 - Comparative Figures Certain comparative figures have been reclassified to conform with the current year's presentation. Note 11 - Subsequent Events Property Acquisitions Subsequent to September 30, 2001 the Corporation has contracted to acquire 120 units for a purchase price of $7.0 million. The acquisition was financed through cash of $3.0 million and the assumption of an existing mortgage. Property Dispositions Subsequent to September 30, 2001 the Corporation sold a total of 71 units to unrelated parties for an aggregate purchase price of $3.8 million. These transactions were completed on November 1, 2001 and will result in a $0.5 million gain. CORPORATE INFORMATION Corporate Directory Executive Offices First West Professional Building Suite 200, 1501 - 1st Street SW Calgary, Alberta T2R 0W1 Telephone: (403) 531-9255 Facsimile: (403) 531-9565 Website: www.bwalk.com Board of Directors Sam Kolias Calgary, Alberta George J. Reti Calgary, Alberta Van Kolias Calgary, Alberta Kevin P. Screpnechuk Calgary, Alberta Ernest Kapitza Calgary, Alberta Paul J. Hill Regina, Saskatchewan David V. Richards Calgary, Alberta Michael D. Young Dallas, Texas Solicitors 4300 Bankers Hall West 888 - 3 Street SW Calgary, Alberta T2P 5C5 Butlin Oke Roberts & Nobles 100, 1501 - 1st Street SW Calgary, Alberta T2R 0W1 Bankers Toronto Dominion Bank 340 - 5th Avenue SW Calgary, Alberta T2P 2P6 Auditors Deloitte & Touche LLP 3000, 700 - 2nd Street SW Calgary, Alberta T2P 0S7 Registrar & Transfer Agent Computershare Trust Company of Canada 600, 530 - 8th Avenue SW Calgary, Alberta T2P 3S8 Stock Exchanges The Toronto Stock Exchange The New York Stock Exchange |
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