Cadillac Fairview's Cash Flow Up More Than 20% In Fourth Quarter And Year Ended October 31, 1999.TORONTO--(BUSINESS WIRE)--Dec. 15, 1999-- Cadillac Fairview The Cadillac Fairview Corporation is a development corporation which is a wholly owned subsidiary of the Ontario Teachers' Pension Plan. Cadillac Fairview owns, develops and manages property, malls and large office and retail spaces, mostly in Canada and the United States. Corporation (TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). :CDF (1) (Central Distribution Frame) A connecting unit (typically a hub) that acts as a central distribution point to all the nodes in a zone or domain. See MDF. ) (NYSE NYSE See: New York Stock Exchange :CDF) today announced its financial results for the fourth quarter and year ended October October: see month. 31, 1999, reflecting continued growth in fully 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. operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. per share, well in excess of its 15% annual target. Operating cash flow in the fourth quarter was C$68.5 million - up 22% from the same quarter in fiscal 1998 on a 5% increase in revenue to C$237.2 million. On a fully diluted per share basis, operating cash flow rose 22% to C$0.83 from C$0.68 in the fourth quarter of fiscal 1998. "Once again, our industry-leading property management and development initiatives, combined with positive conditions in the North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. real estate market, translated into excellent operating results in the fourth quarter," said Jon JON Jonah JON Jesus of Nazareth JON Job Order Number JON Johnston Island, US, Outlying Islands (Airport Code) Hagan, Cadillac Cadillac expensive automobile and status symbol. [Trademarks: Crowley Trade, 83] See : Luxury Fairview's Executive Vice President and Chief Financial Officer. "For the 13th consecutive quarter, we have built on our solid track record for strong year-over-year revenue and cash flow growth." Internal growth of 7% -- on an unlevered basis -- was the key performance driver, accounting for C$8.5 million, or 69%, of the C$12.3 million increase in operating cash flow over the fourth quarter of last year. A further C$3.9 million, or about 30%, of the growth in operating cash flow was attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to the acquisitions of Broward Mall Broward Mall is a one-level 1.0 million sf shopping mall in Plantation, Florida, a suburb of Fort Lauderdale The mall has recently completed a multi-million-dollar renovation, and is operated and co-owned by the Simon Property Group. in Fort Lauderdale Fort Lauderdale (lô`dərdāl), residential, commercial, and resort city (1990 pop. 149,377), seat of Broward co., SE Fla., on the Atlantic coast; settled around a fort built (c.1837) in the Seminole War, inc. 1911. and Encor Place in 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 in fiscal 1999, and the eight-property BIMCOR office portfolio early in the fourth quarter of 1998. Results for the year ended October 31, 1999 For the fiscal year ended October 31, 1999, 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 climbed 26% to $C275.1 million on a 15% increase in revenue to C$942.8 million. Cash flow from operations included pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta lease cancellation cancellation (See: cancel) CANCELLATION. Its general acceptation, is the act of crossing a writing; it is used sometimes to signify the manual operation of tearing or destroying the instrument itself. Hyde v. Hyde, 1 Eq. Cas. Abr. 409; Rob. income of C$7.6 million, up 25% from C$6.1 million in fiscal 1998. Fully diluted operating cash flow per share increased 23% to C$3.30 from C$2.68 in fiscal 1998. Approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 60% of the improvement in operating cash flow was due to internal growth at existing properties and 37% was due to acquisitions in fiscal 1999 and 1998. Property Operations All three of the Corporation's property portfolios reported healthy internal growth and increases in 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. in the fourth quarter and in fiscal 1999 as a whole. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Hagan, "Strong across-the-board internal growth reflects the success of synergistic synergistic /syn·er·gis·tic/ (sin?er-jis´tik) 1. acting together. 2. enhancing the effect of another force or agent. syn·er·gis·tic adj. 1. marketing and development projects undertaken to maximize In a graphical environment, to enlarge a window to the full size of the screen. See Win Maximize windows. the value of an already premium property portfolio in the past year, as well the general market upswing Upswing An upward turn in a security's price after a period of falling prices. in real estate rental RENTAL. A roll or list of the rents of an estate containing the description of the lands let, the names of the tenants, and other particulars connected with such estate. This is the same as rent roll, from which it is said to be corrupted. rates." Rental rate uplift in Cadillac Fairview's properties averaged in excess of 15% in fiscal 1999. The Corporation's largest portfolio, 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. retail properties, generated net operating income (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 ) of C$75.5 million in the fourth quarter, up 6% from the same quarter a year ago. Internal NOI growth of 9% was the primary growth driver, fueled by increases in percentage rent and new specialty A contract under seal. A specialty is a written document that has been sealed and delivered and is given as security for the payment of a specifically indicated debt. leasing initiatives and an average 15% increase in rental rates on 1999 leasing activity. Growth in retail sales continued in the fourth quarter with sales increasing 2.2% to $477 per square foot, an increase of 3.3% in the last year. The sale of two properties during the year reduced 1999 NOI compared to 1998 by $C1.4 million. Canadian office properties reported a 9% increase in NOI to C$30.8 million. Internal NOI growth was 4% during the quarter due to higher rental rates on 1999 leasing activity offset partially by lower occupancy Gaining or having physical possession of real property subject to, or in the absence of, legal right or title. In a fire insurance policy, for example, the term occupancy . The 1999 acquisition of Encor Place and office property acquisitions in late fiscal 1998 contributed C$1.0 million, or 3%, to NOI growth. Lease cancellation fees contributed C$0.7 million. NOI from the U.S. retail properties portfolio jumped 30% year-over-year to US$16.1 million in the fourth quarter. The acquisition of Broward Mall earlier in the year and the remaining 20% of Northpark Mall Northpark Mall (or NorthPark Mall) is the name of several shopping malls in the United States:
Portfolio Operating Highlights
3 months ended 12 months ended
October 31, 1999 October 31, 1999
---------------- ----------------
Cash Flow From Operations $ Growth $ Growth
-------------------------
Cash flow from operations
(millions) 68.5 22% 275.1 26%
Per share (fully-diluted) 0.83 22% 3.30 23%
Net Operating Income (millions)
--------------------
Canadian retail 75.5 6% 307.1 13%
Canadian office 30.8 9% 123.3 21%
US retail (US$) 16.1 30% 60.8 23%
Internal Growth in Net Operating
Income
--------------------------------
Canadian retail 9% 8%
Canadian office 4% 6%
US retail 8% 10%
12 months ended
October 31, 1999
-----------------
Retail Sales $ per sq. ft. Growth
------------
Canadian retail 477 3.3%
US retail (US$) 351 4.3%
As at October 31
-----------------
Occupancy 1999 1998
---------
Canadian retail 95.1% 95.3%
Canadian office 93.7% 94.0%
US retail 84.9% 84.6%
12 months ended
October 31, 1999
----------------
Leasing activity 000's sq.ft. Rate growth
Canadian retail 1.2 16%
Canadian office 1.1 16%
US retail 0.2 27%
-----------------
2.3 17%
Recent Achievements
During and since the fourth quarter, Cadillac Fairview
successfully completed several projects to enhance the value of its
existing properties:
-- Masonville Place: The C$30 million project at a London, Ontario
shopping centre included the redevelopment of 90,000 square feet
of retail space; 25,000 sq. ft. of new specialty store space; and
a 40% increase in food court seating capacity. The project is now
fully leased, with 45 new stores including Eddie Bauer, The Gap,
Jacob, Dockers, and Sony; and the existing Roots store has
tripled in size. A 12-screen Famous Players Silver City theatre
complex will open in the spring of 2000.
-- Toronto Eaton Centre, Centre Court: The C$22 million, 50,000 sq.
ft. expansion included all three floors of Centre Court at
Toronto Eaton's Centre. The expansion includes the flagship store
of Indigo Books and Music Cafe; and the first Toronto location
for the high-end U.S. women's fashion retailer, bebe.
-- Toronto Eaton Centre, Exterior Facade: The C$20 million
remodeling of an exterior facade of the Toronto Eaton Centre
involved the addition of 18,000 sq. ft. of prime retail space.
The project is now fully leased to tenants such as radio station
CFNY, Ontario's first Baton Rouge -- a Houston-style restaurant
concept and the Centre's first Starbuck's. The Yonge Street
facade also features 15 unique backlit super-boards that are 100%
leased.
-- Cataraqui Town Centre: The C$33 million expansion of a 50%-owned
shopping centre in Kingston, Ontario, included a 127,000 sq. ft.
Sears store and about 50,000 sq. ft. for 25 specialty stores, all
of which are now open.
Other Recent Highlights
-- Eaton's Progress: Within just one month of the dissolution of
Eaton's, 11 of the 17 Cadillac Fairview-owned properties formerly
occupied by d to The Bay, Zellers and Sears. The Hudson's Bay
Company will assume the tenancy of six stores, four of which will
operate under The Bay name and two as Zellers. Sears will reopen
four stores under the Eaton's brand, including the flagship
Toronto Eaton Centre store. The new leasing agreements replace
approximately 85% of the C$23 million Eaton's formerly
contributed to consolidated revenue on an annual basis and are
expected to generate greater traffic and sales at the
Corporation's centres.
-- Teachers' Pension Plan Board ("Teachers") Offer: Further to
Cadillac Fairview's recent examination of strategic alternatives
to increase shareholder value, it reached an agreement with
Teachers on December 1, 1999 whereby it will offer to purchase:
-- all of the approximately 78.2% of outstanding common shares
of Cadillac Fairview that Teachers does not already own for
C$34 per share;
-- the Corporation's 5.7% convertible unsecured subordinated
debentures at par plus accrued and unpaid interest.
Given that the C$34 per share offer represents a fair premium
over its share price prior to the offer, the Corporation's Board
of Directors has recommended its shareholders vote in favour of
the transaction at a special meeting of shareholders to be held
in January.
-- Industry Awards: During the fourth quarter, eight of the
Corporation's Canadian retail properties and three of its office
properties were honoured with a total of 21 national and
international commercial real estate awards, recognizing the
quality, management, environment, and marketing of Cadillac
Fairview's properties. These awards confirm the Corporation's
market leadership and the dominance of its properties.
Outlook
In fiscal 2000, Cadillac Fairview expects to build on its
three-year track record of generating 22% compound annual growth in
fully diluted operating cash flow. With the highest quality commercial
real estate portfolio in Canada, Cadillac Fairview is especially well
positioned to benefit from continuing North American economic
expansion, limited new real estate supply, and rental rate uplifts
upon the renewal of below-market leases.
"While Cadillac Fairview's Board of Directors has recommended
that shareholders vote in favour of Teachers' offer to purchase our
shares at our upcoming special shareholders meeting, Cadillac Fairview
is, and will continue to be, a well managed company with an
enthusiastic team," said Chairman, President, and CEO, Bruce Duncan.
"We have several initiatives and projects underway that we are
energetically pursuing to deliver our usual superior performance in
future periods."
Projects and initiatives currently underway include:
-- Eaton's Stores Re-tenanting and Redevelopment: As a result of the
agreement reached with Sears, the second floor below street level
of the former Eaton's store in the Toronto Eaton Centre will be
renovated. This level, which is excluded from the new leasing
agreement with Sears, will be remodeled for new in-line tenants.
The Corporation is also in the process of finalizing replacement
tenants for the remaining six Eaton's stores in Cadillac Fairview
owned properties. As is the case with its arrangements with
Sears, Zellers and The Bay, this re-tenanting is expected to
result in higher rental rates, traffic and sales and a more
exciting shopping experience and environment for our customers.
It is anticipated that a $109 million investment in re-tenanting
and redevelopment of the Eaton's vacated stores will generate a
greater than 10% return.
-- The Mall at Stonecrest: In the fourth quarter, development began
of a 1.3 million sq. ft super regional shopping centre in
Atlanta, Georgia, slated to open in the fall of 2001. The project
is a joint venture with Forest City Enterprises Inc., a prominent
U.S. developer and is projected to cost US$114 million. Four of
five anchors are already committed. The project also involves the
sale or development of 900 acres of adjacent land owned by the
Corporation.
-- Northpark Mall: The remaining 20% of this now 100%-owned 958,000
sq. ft. shopping centre in Ridgeland, Mississippi was purchased
for US$20.9 million during the fourth quarter. The centre has
four anchor tenants and sales 12% above the industry average.
-- Web-based concierge service: In November, the Company launched
www.tectowers.com, North America's first web-based concierge
service for commercial real estate tenants. This free service is
being piloted in the three office towers of Toronto Eaton Centre
for Canada-wide roll-out in 2000.
In short, Cadillac Fairview's ongoing leasing, development, and
marketing initiatives should continue to enhance both the value of its
properties and its industry and financial leadership in fiscal 2000
and beyond.
CONSOLIDATED BALANCE SHEETS
(in thousands of Canadian dollars)
October 31, 1999 October 31, 1998
---------------- ----------------
Assets
Real estate assets $4,646,664 $4,486,312
Amounts receivable 58,341 56,259
Other assets 245,620 120,641
----------------------------------------
$4,950,625 $4,663,212
----------------------------------------
----------------------------------------
Liabilities
Long-term debt $3,033,148 $2,840,083
Accounts payable and other
liabilities 173,666 147,937
Deferred income taxes 85,394 36,422
----------------------------------------
3,292,208 3,024,442
----------------------------------------
Shareholders' Equity 1,658,417 1,638,770
----------------------------------------
$4,950,625 $4,663,212
----------------------------------------
----------------------------------------
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
(in thousands of Canadian dollars except per share and share amounts)
Three months Twelve months
ended October 31, ended October 31,
---------------- -----------------
1999 1998 1999 1998
---- ---- ---- ----
Revenue
Rental $229,122 $220,704 $918,520 $793,085
Management and
development fees 4,371 4,575 16,384 17,065
Interest 3,732 1,423 7,902 8,607
-----------------------------------------------
237,225 226,702 942,806 818,757
---------- ---------- -------- --------
Expenses
Property operating 98,889 102,309 396,918 347,859
Interest 55,089 55,493 214,701 202,128
General and
administrative 9,618 8,205 36,723 32,977
Capital taxes 2,600 3,100 10,200 9,800
Depreciation and
amortization 33,214 23,108 118,255 92,368
-----------------------------------------------
199,410 192,215 776,797 685,132
-----------------------------------------------
Operating income 37,815 34,487 166,009 133,625
Loss on abandoned projects (385) - (1,484) -
Loss on sale of rental
properties (11) - (2,910) -
Gain / (loss) on early
extinguishment of
long-term debt 34 (12,650) (6,651) (45,930)
-----------------------------------------------
37,453 21,837 154,964 87,695
Income taxes (13,000) (2,300) (58,000) (29,200)
-----------------------------------------------
Net income 24,453 19,537 96,964 58,495
Retained earnings,
beginning of period 159,340 100,249 112,281 75,359
Premium on purchase and
cancellation of common
shares and warrants - (7,273) (24,478) (21,341)
Provision for settlement
of convertible debentures (376) (232) (1,350) (232)
-----------------------------------------------
Retained earnings, end
of period $183,417 $112,281 $183,417 $112,281
-----------------------------------------------
-----------------------------------------------
Net income per share
-- basic $0.32 $0.25 $1.25 $0.75
-- fully diluted $0.30 $0.25 $1.18 $0.75
Weighted average number
of shares outstanding
-- basic 75,790,072 78,083,207 76,702,936 77,359,070
-- fully diluted 87,970,581 88,416,741 88,552,229 86,316,888
CONSOLIDATED CASH FLOW STATEMENTS
(in thousands of Canadian dollars, except per share amounts)
Three months Twelve months
ended October 31, ended October 31,
----------------- ------------------
1999 1998 1999 1998
---- ---- ---- ----
Operating activities
Net income $ 24,453 $ 19,537 $ 96,964 $ 58,495
Items not affecting
cash from operations
Depreciation and
amortization 33,214 23,108 118,255 92,368
Deferred income taxes 10,900 900 50,300 20,800
Loss on sale of rental
properties 11 - 2,910 -
Loss / (gain) on early
extinguishment of
long-term debt (34) 12,650 6,651 45,930
-----------------------------------------------
Cash flow from
operations 68,544 56,195 275,080 217,593
Net changes in other
operating items (18,643) 7,050 (50,584) (18,684)
-----------------------------------------------
Cash provided by
operating activities 49,901 63,245 224,496 198,909
-----------------------------------------------
Financing activities
Long-term debt:
Refinancing 37,810 176,416 497,123 1,009,049
Repayments (23,344) (244,083) (323,765)(1,198,837)
Issue of common shares 466 234 774 333,416
Issue of convertible
debentures - 96,751 - 96,751
Purchase and
cancellation of shares
and warrants - (12,534) (62,906) (38,277)
Restricted cash 8,811 (2,042) 6,723 4,975
-----------------------------------------------
Cash provided by
financing activities 23,743 14,742 117,949 207,077
-----------------------------------------------
Investing activities
Rental properties:
Proceeds from sale (11) - 60,296 -
Acquisitions (15,914) (61,393) (193,103) (347,568)
Development
expenditures (30,419) (33,216) (89,996) (48,525)
Capital expenditures 3,611 3,074 (5,964) (17,503)
Land under development (1,709) (874) (19,894) (3,281)
Properties held for
sale 1,207 (3,799) 7,968 (1,335)
Amounts receivable and
other assets 2,249 (906) 4,095 4,683
-----------------------------------------------
Cash used by investing
activities (40,986) (97,114) (236,598) (413,529)
-----------------------------------------------
Net increase (decrease)
in unrestricted cash and
short-term
investments 32,658 (19,127) 105,847 (7,543)
Unrestricted cash and
short-term investments,
beginning of period 99,227 45,165 26,038 33,581
-----------------------------------------------
Unrestricted cash and
short-term investments,
end of period $131,885 $26,038 $131,885 $26,038
-----------------------------------------------
Cash flow from
operations per share
-- basic $0.90 $0.72 $3.55 $2.81
-- fully diluted $0.83 $0.68 $3.30 $2.68
-0- Corporate Description Cadillac Fairview is one North America's largest owners, managers and developers of commercial real estate. It owns interests in or manages 102 properties totaling approximately 51 million square feet. The Company's real estate portfolio is focused on high quality retail centres 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 the U.S., and office properties in major Canadian cities. Landmark A structure that has significant historical, architectural, or cultural meaning and that has been given legal protection from alteration and destruction. Although landmark preservation laws vary by city and state, they have the same basic purpose: to keep landmarks as close properties include Toronto Eaton Centre The Toronto Eaton Centre is a large shopping mall and office complex in downtown Toronto, Ontario Canada, named after the now-defunct Eaton's department store chain. In terms of the number of visitors, the shopping mall is Toronto's top tourist attraction. , Toronto-Dominion Centre The Toronto-Dominion Centre is a large cluster of buildings in downtown Toronto, Ontario, Canada. It is home to the Toronto-Dominion Bank, as well as many other businesses. 21,000 people work in the complex, making it the largest in Canada. in 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 , Pacific Centre in Vancouver Vancouver, city, Canada Vancouver, city (1991 pop. 471,844), SW British Columbia, Canada, on Burrard Inlet of the Strait of Georgia, opposite Vancouver Island and just N of the Wash. border. and Montreal Montreal (mŏn'trēôl`), Fr. Montréal (môNrāäl`), city (1991 pop. 1,017,666), S Que., Canada, on Montreal island, surrounded by St. Lawrence River and Rivière des Prairies. Eaton Centre
Eaton's, which was once Canada's largest department store chain, partnered with development companies throughout the 1970s and 1980s to in Montreal. Cadillac Fairview is a public company listed on 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 The Toronto Stock Exchange Toronto Stock Exchange (TSE) Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options. under the symbol CDF. 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 involve inherent risks and uncertainties. We have identified certain important factors that may cause actual results to differ materially from those contained such forward-looking statements. These factors are described in the risk management section of 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 of Operations and Financial Condition found in the Corporation's Form 40-F currently filed with the SEC and subsequent public disclosure documents filed with the SEC. |
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