Trizec Reports Higher First Quarter Rental Income and Cash Flow.TORONTO--(BUSINESS WIRE)--May 2, 1996--Trizec Corporation Ltd. reported rental income Noun 1. rental income - income received from rental properties income - the financial gain (earned or unearned) accruing over a given period of time increased 13% to $80.7 million in the first quarter of 1996, reflecting the strong contribution of assets acquired in 1995 and overall improvements in the Company's operations. Net income was $10 million, 9 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. , for the three months ended March 31, 1996, essentially unchanged from $10.1 million, 9 cents per share, for the same period in 1995. Higher interest and depreciation expense related to acquisitions offset the increase in rental income. Trizec's 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 increased 9% to $24.2 million, 22 cents per share, in the first quarter, compared with $22.3 million, 21 cents per share, for the same period in 1995. "Trizec's improved operating performance reflects the steady progress we have made strengthening the Company's property portfolio," said Gregory C. Wilkins Wil·kins , Maurice Hugh Frederick 1916-2004. British biophysicist. He shared a 1962 Nobel Prize for his contributions to the determination of the structure of DNA. , President and Chief Executive Officer. "By making selective acquisitions with higher growth potential, Trizec was able to increase rental income and cash flow, despite completing $185 million of dispositions in 1995." Rental income in the office portfolio increased 22% to $46.2 million in the first quarter, from $38 million in the same period last year, primarily because of office acquisitions in 1995. Trizec leased over 800,000 square feet of office space during the first quarter. Office 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 was 88%. Trizec's shopping malls shopping mall or shopping centre Collection of independent retail stores, services, and parking areas constructed and maintained by a management firm as a unit. It is a 20th-century adaptation of the historical marketplace. In the U.S. reported a 4% increase in rental income to $34.5 million, due to increased ownership in several centres and improved performance of the major market portfolio. Tenant sales in Trizec's malls remained solid, averaging $302 per square foot for the last twelve months. For the first quarter of 1996, sales per square foot increased 10% over the same period in 1995. At the end of the quarter, shopping mall occupancy was 88%. Trizec Corporation Ltd. is one of the largest publicly traded real estate companies in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. with interests in 74 properties, comprising 52 million square feet. Trizec's portfolio consists of office buildings in the 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. and 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 regional retail centres in the United States. Trizec's shares and warrants trade on the New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of (warrants as of April 1996), 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 and Montreal stock exchanges Montreal Stock Exchange See Bourse de Montreal, Inc. (Canadian Derivatives Exchange) under the symbol TZC TZC Time Zone Converter TZC Twentse Zweefvliegclub TZC Twilight Zone Crew (French graffiti group) . Unaudited 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 are attached. -0- CONSOLIDATED BALANCE SHEETS (UNAUDITED) (U.S. $ millions) March 31 December 31 (U.S. $ millions) Note 1996 1995
Assets
Properties 2 3,547.5 3,548.9
Investments, including cash 107.0 105.9
Accounts receivable 67.9 70.2
Prepaid and other assets 103.6 95.0
3,826.0 3,820.0
Liabilities
Long-term debt 3 2,521.9 2,530.4
Accounts payable & accrued
liabilities 191.5 194.7
2,713.4 2,725.1
Deferred Income Taxes 29.7 24.5
Shareholders' Equity 1,082.9 1,070.4
3,826.0 3,820.0
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
3 Months 3 Months
Ended Ended
March 31 March 31
(U.S. $ millions) Note 1996 1995
Rental Operations Rental revenue 142.6 126.9 Operating expense 48.6 42.9 Property taxes 13.3 12.7 Rental Income 5 80.7 71.3 General & administrative expense 4.8 3.7 Interest expense, net 4 50.9 46.1 Operating Income before Non-Cash 25.0 21.5 Operating Items Depreciation expense 9.0 7.4 Income & other corporate tax expense 6.0 4.0 Net Income 10.0 10.1 Net income per share 1 9.2c 9.3c See accompanying Notes to Consolidated Financial Statements. Contingencies (Note 6) CONSOLIDATED STATEMENTS OF CASH FLOW FROM OPERATIONS (UNAUDITED)
3 Months 3 Months
Ended Ended
March 31 March 31
(U.S. $ millions) Note 1996 1995
Operating Income before
Non-Cash Operating Items 25.0 21.5
Current taxes (recovery) 0.8 (0.8)
Cash Flow from Operations 24.2 22.3
Cash Flow from operations
per share 1 22.3c 20.6c
CONSOLIDATED STATEMENTS OF CHANGES IN CASH FLOW (UNAUDITED)
3 Months 3 Months
Ended Ended
March 31 March 31
(U.S. $ millions) 1996 1995
Cash flow from (applied to)
Operating Activities
Cash flow from operations 24.2 22.3
Net change in operating
working capital (0.4) (5.1)
Total operating cash flows 23.8 17.2
Financing Activities
Long-term debt
Development financing 22.3 --
Regular principal repayments (5.5) (7.8)
Repaid on disposition -- (33.2)
Other repaid, net (4.1) (26.2)
Total financing cash flows 12.7 (67.2)
Total Operating & Financing
Cash Flows 36.5 (50.0)
Investment Activities
Properties
Tenant Installation costs (5.0) (7.3)
Capital expenditures (3.0) (3.7)
Development expenditures (26.0) (8.8)
Dispositions 6.4 58.8
Investments (2.2) (0.8)
Funds retained in other
assets and liabilities (7.2) (28.8)
Total investing cash flow (37.0) 9.4
Net Decrease in Cash and
Cash Equivalents (0.5) (40.6)
See accompanying Notes to Consolidated Financial Statements NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) FOR THE 3 MONTHS ENDED MARCH 31, 1996 1. BASIS OF ACCOUNTING AND SIGNIFICANT ACCOUNTING POLICIES. a. Reporting currency
The consolidated financial statements are presented in
U.S. dollars, as it is the currency of the primary
economic environment in which the Corporation conducts its
operations.
b. Per share calculations
Net income and cash flow from operations per share
have been calculated based on the weighted average number
of Common and Non-Voting Special Shares outstanding during
the periods of 108,357,134 shares.
c. Capital reorganizations and comprehensive revaluation
The consolidated financial statements give effect to a
significant capital reorganization of the Corporation, and
a comprehensive revaluation of its assets and liabilities,
both effective July 25, 1994.
The Corporation's balance sheets after July 25, 1994 are presented on a "fresh start" basis after giving effect to both the capital reorganization which increased shareholder' equity by $1,062.9 million and the comprehensive revaluation which reduced shareholders' equity by $550.7 million. Certain comparative figures have been reclassified to conform with the current year's presentation. 2. PROPERTIES
March 31 December 31
(U.S. $ millions) 1996 1995
Rental properties 3,394.6 3,406.3
Rental properties
under development 121.7 97.9
Properties held
for development 82.2 87.1
3,598.5 3,591.3
Less accumulated depreciation 51.0 42.4
3,547.5 3,548.9
3. LONG TERM DEBT
Weighted average
interest rates as March December
(U.S.$ millions) at March 31, 1996 31, 1996 31,1995
Secured property loans
At fixed rates 9.21% 1,184.2 1,245.3
At variable rates 6.76% 260.3 260.0
(subject to interest
rate caps)
At variable rates 6.96% 736.9 688.3
Senior Notes due 10.88% 250.0 250.0
October 15, 2005 (at fixed rates)
Other loans
(at fixed rates) 9.42% 90.5 86.8
8.47% 2,521.9 2,530.4
Included in "Other loans" is an unsecured load in the amount of approximately $83 million. As disclosed in the December 31, 1995 consolidated Financial Statements, the Corporation has been in discussions with the lender regarding the repayment date of this loan. Subsequent to March 31, 1996, the lender has given notice to the Corporation that it believes the repayment date has passed. As March 31, 1996, the Corporation had cash and cash equivalents on hand of $80.3 million and available committed secured credit facilities in the amount of $67.5 million, which are available to repay this financing if necessary. 4. INTEREST EXPENSE, NET
Interest charges consist of:
3 Months 3 Months
Ended Ended
March 31 March 31
(U.S. $ million) 1996 1996
Interest Cost, gross 56.2 51.4
Interest capitalized to rental
properties under development 2.5 1.2
Interest expense 53.7 50.2 Interest Income 2.8 4.1 Interest expense, net 50.9 46.1 5. PORTFOLIO DISTRIBUTION OF RENTAL INCOME
Rental income by portfolio consists of:
3 Months 3 Months
Ended Ended
March 31 March 31
(U.S. $ millions) 1996 1995
Rental Income
Regional Malls (U.S.)
Major market 27.5 23.3
Mid-market 7.0 10.0
34.5 33.3
Office and Mixed Use
U.S. 20.5 13.8
Canada 25.7 24.2
46.2 38.0
Total 80.7 71.3 6. CONTINGENCIES Contingencies (ISSN 1048-9851) is the bimonthly magazine of the American Academy of Actuaries, providing a large and diverse readership with general interest and technical articles on a wide range of issues related to the actuarial profession. As more fully described in Note 9 to the Corporation's December December: see month. 31, 1995 Consolidated Financial Statements, in 1995 the Corporation commenced an action against Husky Oil Operations Ltd., ("Husky"), a tenant and 50% joint venture partner in Western Canadian Place Western Canadian Place is an office tower complex in Calgary, Alberta. It consists of two buildings, the taller North Tower and the shorter South Tower. It was designed by the architectural firm, Cohos Evamy (the same firm who designed Bankers Hall - East and Bankers Hall - , to enforce Husky's lease obligations. Husky has filed a counterclaim A claim by a defendant opposing the claim of the plaintiff and seeking some relief from the plaintiff for the defendant. A counterclaim contains assertions that the defendant could have made by starting a lawsuit if the plaintiff had not already begun the action. the Corporation and its outside counsel believe to be without merit. Irrespective of irrespective of prep. Without consideration of; regardless of. irrespective of preposition despite the merits The strict legal rights of the parties to a lawsuit. The word merits refers to the substance of a legal dispute and not the technicalities that can affect a lawsuit. A judgment on the merits is the final resolution of a particular dispute. MERITS. of the Corporation's position, the uncertainties of the litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. process are such that thee is a risk that Husky's actions may cause a material reduction in the Corporation's net cash flow after debt service from this property. CONTACT: Trizec Corporation Ltd. Upkar Arora ARORA Arkansas Regional Organ Recovery Agency Senior Vice President, Finance phone: (416) 361-7210 fax: (416) 361-7203 |
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