TORONTO, ONTARIO–(Marketwired – July 29, 2016) – RioCan Real Estate Investment Trust (“RioCan”) (TSX:REI.UN) –
RioCan’s HIGHLIGHTS for the three and six months ended June 30, 2016 were:
- During the quarter, RioCan completed the sale of its U.S. operations. With the proceeds from the sale, RioCan has reduced its Total Debt to Total Assets ratio (net of cash, on a proportionate basis) to a historically low 38.0% as at June 30, 2016, from 46.3% as at December 31, 2015;
- On June 1, 2016 RioCan entered into a new $1 billion unsecured operating credit facility (“Operating
Facility”), which replaced RioCan’s secured operating credit facilities;
- The new Operating Facility, together with the debt repayments from the sale of the U.S. portfolio enabled RioCan to grow its unencumbered asset pool as at June 30, 2016 to $5.4 billion, or 256% of the Trust’s unsecured debt;
- As expected due to the sale of RioCan’s U.S. operations during the quarter, Operating Funds From Operations (“Operating FFO”) for the Second Quarter was lower by $1 million, or 0.9% at $135 million as compared to $136 million for the same period in 2015. On a per unit basis Operating FFO was $0.42 per unit as compared to $0.43 per unit for the second quarter in 2015, representing decline of 2.9%. However, RioCan’s Canadian or continuing operations produced solid results;
- On a continuing operations basis, Operating FFO increased $8.8 million, or 8.1% to $118 million in the
Second Quarter as compared to $109 million the second quarter of 2015;
- Same Store Net Operating Income (“NOI”) turned positive in the three months ended June 30, 2016 (“Second Quarter”). Canadian same store NOI increased 0.8%, or $1.1 million in the Second Quarter compared to the same period in 2015;
- RioCan’s concentration of annualized net rental revenue in Canada’s six major markets as at June 30,
2016 increased to 75.7% from 74.4% as at June 30, 2015;
- RioCan’s AFFO payout ratio for the twelve months ended June 30, 2016 improved to 89.9% as compared to 94.5 % for the twelve months ended June 30, 2015;
- Committed occupancy improved 200 basis points in Canada, to 95.1% at June 30, 2016 from its lowest point in the prior year of 93.1% at June 30, 2015;
- After the quarter end, RioCan acquired CPPIB’s interest in four properties at an aggregate purchase price of $352 million, and since September 30, 2015 RioCan has acquired, net of dispositions, an interest in more than $1.1 billion of income producing properties in Canada; and
- In RioCan’s development portfolio RioCan REIT, Allied Properties REIT and Diamondcorp (collectively, “The Well JV”) entered into a binding agreement to sell the residential component of The Well to Tridel Builders Inc. and Woodbourne Canada Partners III (CA) LP. This agreement will reduce the financial exposure to the project, and is expected to enable the partners to develop The Well in a single phased development.
RioCan Real Estate Investment Trust (“RioCan”) today announced its financial results for the three and six months ended June 30, 2016.
“During the past quarter we achieved three very significant milestones in the history of the Trust. Through the sale and repatriation of our capital from our very successful venture into the U.S., we reduced our leverage to its lowest level in our history,” said Edward Sonshine, Chief Executive Officer of RioCan. “I am quite satisfied with our growth in Operating FFO in our Canadian operations and expect it to grow over the next two years. Our recently announced acquisitions, completions in our ongoing development programme, and lease up of current vacancies lead me to be confident about RioCan’s Canadian growth in the near term. Over the long term, our urban development and intensification strategy will be the key contributor to our future Operating FFO growth. Our ability to achieve all of this without materially increasing our leverage from its current historical low level is a direct result of our strategic move into and out of the United States, and the significant new capital creation resulting from that profitable strategy.”
All figures are expressed in Canadian dollars unless otherwise noted. For further information about RioCan’s results for the three and six months ended June 30, 2016, this earnings release should be read in conjunction with our unaudited interim condensed consolidated financial statements (“Consolidated Financial Statements”), as well as, management’s discussion and analysis for the three and six months ended June 30, 2016 together with our 2015 Annual Report.
RioCan’s Consolidated Financial Statements are prepared in accordance with International Financial Reporting Standards (“IFRS”). Consistent with RioCan’s management framework, management uses certain financial measures to assess RioCan’s financial performance, which are not generally accepted accounting principles (GAAP) under IFRS. For full definitions of these measures, please refer to the “Use of Non-GAAP Measures” in RioCan’s June 30, 2016 Management’s Discussion and Analysis. As a result of the recently completed sale of its U.S. operations, we have reported our former U.S. geographic segment performance as “discontinued operations” with comparative income statement amounts adjusted to reflect this change, unless otherwise noted.
|Three months ended
|Six months ended
|(in millions except percentages and per unit values)||2016||2015||% Change||2016||2015||% Change|
|Operating FFO (i)||$135.1||$136.3||(0.9%)||$282.8||$274.3||3.1%|
|Operating FFO per Unit||$0.42||$0.43||(2.9%)||$0.87||$0.86||1.0%|
|FFO per Unit||$0.41||$0.42||(3.2%)||$0.85||$0.82||3.2%|
|(i)||A non-GAAP measurement. Operating FFO and FFO includes both continuing and discontinued operations. A reconciliation to net earnings can be found under “Results of Operations” in RioCan’s Management’s Discussion and Analysis for the period ending June 30, 2016.|
|Three months ended
|Six months ended
|(in millions except percentages and per unit values)||2016||2015||% Change||2016||2015||% Change|
|Net income from continuing operations||$142.7||$59.6||139.4%||$251.0||$105.3||138.4%|
|Net earnings from continuing operations before taxes and fair value adjustment||$112.9||$108.3||4.2%||$223.8||$205.6||8.9%|
|Net earnings per unit from continuing operations attributable to unitholders – diluted||$0.43||$0.18||138.9%||$0.74||$0.31||138.7%|
|(in millions)|| June 30,
|Total enterprise value (i)||$14,883||$15,318|
|(i)||A non-GAAP measurement. Calculated by the Trust as debt at RioCan’s interest plus common Unit market capitalization plus Preferred Unit market capitalization.|
|(ii)||Debt is defined as the sum of mortgages payable, bank loans, lines of credit, and debentures payable.|
Net income from continuing operations attributable to unitholders (Canadian Operations)
Net income from continuing operations attributable to unitholders for the second quarter of 2016 is $143 million compared to $59 million during the same period in 2015, representing an increase of $83 million or 140%. Excluding $79 million in fair value adjustments and taxes from this increase, net income from continuing operations attributable to unitholders for the second quarter of 2016 is $113 million compared to $108 million in 2015, representing an increase of $4.6 million or 4.2%.
The increase of $4.6 million is largely explained by the following:
- $9.8 million of income primarily due to contributions from property acquisitions (net of dispositions), net of lower lease cancellation fees and straight-line rents; partly offset by
- $3.1 million in higher corporate and other expenses primarily reflecting transaction costs relating to increased property acquisition and disposition activity and higher general and administrative expenses; and
- $2.1 million in lower property and management fees reflecting a rezoning fee recognized during Q2 2015 and, to a lesser extent, the impact of lost management fees as a result of our purchase of Kimco’s interest in a portfolio of income properties during Q4 2015.
Net income from continuing operations attributable to unitholders for the first six months of 2016 is $251 million compared to $105 million during the same period in 2015, representing an increase of $146 million or 139%. Excluding $128 million in fair value adjustments and taxes from this increase, net income from continuing operations attributable to unitholders for the six months ended June 30, 2016 is $225 million compared to $206 million in 2015, representing an increase of $19 million or 9%.
The increase of $19 million is largely explained by the following:
- $14 million in higher income primarily due to increased contributions from property acquisitions (net of disposals), net of lower lease cancellation fees, lower Canadian same store performance, $2.6 million in reduced rental revenue primarily reflecting the impact of Target’s exit from Canada and lower straight-line rents; and
- $9.9 million in lower debt redemption charges; partly offset by
- $2.3 million in lower property and management fees; and
- $1.1 million in higher overall other expenses.
Income from discontinued operations attributable to unitholders is $128 million this quarter compared to $27 million in 2015, representing an increase of $102 million. Included in this increase is $92 million due to fair value adjustments and taxes, without which income from discontinued operations attributable to unitholders would have increased by $10 million.
This $10 million increase is explained by the following: higher income of $17 million due to our U.S. asset sale (net of transaction costs and including the impact of foreign exchange), lower interest costs and other expenses of $5.8 million and reduced losses from equity accounted joint ventures of $4.9 million; all of which are partly offset by $18 million of reduced operating income due to five less weeks of operations.
Income from discontinued operations attributable to unitholders is $167 million compared to $71 million in 2015, representing an increase of $97 million or 137%. Included in this increase is $87 million due to fair value adjustments and taxes, without which income from discontinued operations attributable to unitholders for the first half of 2016 would have increased by $9.4 million.
This $9.4 million increase is due to the same factors as described above for the Second Quarter mainly related to the U.S. asset sale.
Operating Funds From Operations (includes Continuing and Discontinued Operations)
As was anticipated, as a result of the sale of the U.S. portfolio, Operating FFO for the second quarter of 2016 is slightly lower at $135 million compared to $136 million during the same period in 2015, representing a decrease of $1.2 million or approximately 0.9%. On a per unit basis, Operating FFO is $0.42 compared to $0.43, representing a decrease of approximately 2.9%.
In Q2 2016, Operating FFO from continuing operations increased $8.8 million compared to Q2 2015, primarily due to higher NOI of $9.8 million as a result of acquisition activity net of dispositions, $1.6 million in lower Series A preferred unit dividends, $0.7 million in higher income from marketable securities and lower interest costs of $0.7 million partly offset by lower property and asset management fees of $2.1 million and higher general and administrative expenses of $2.0 million.
In Q2 2016, Operating FFO from our U.S. discontinued operations decreased $10.0 million compared to Q2 2015, primarily driven by lower NOI of $16 million, partly offset by $4.9 million of lower interest expense, both of which are due to five fewer weeks of operations in the current quarter.
Operating FFO for the first half of 2016 is $283 million compared to $274 million during the same period in 2015, representing an increase of $8.5 million or approximately 3.1%. On a per unit basis, Operating FFO is $0.87 compared to $0.86, representing an increase of approximately 1.0%.
In 2016, OFFO from continuing operations increased $15 million compared to 2015, primarily due to higher NOI of $14 million mainly as a result of acquisition activity net of dispositions, $1.6 million in lower Series A preferred unit dividends, $1.5 million in higher income from marketable securities and $1.4 million in lower interest costs, partly offset by lower property and asset management fees of $2.3 million and higher general and administrative expenses of $1.7 million.
In 2016, Operating FFO from our U.S. discontinued operations decreased $6.2 million compared to 2015, mainly driven by lower NOI of $12 million partly offset by $4.6 million of lower interest expense, (both of which include the favourable impact of foreign exchange) due to five fewer weeks of operations as a result of the portfolio’s sale in the current period.
During the three months ended June 30, 2016, RioCan completed acquisitions of interests in four income properties aggregating $93 million at a weighted average capitalization rate of 5.6%, representing RioCan’s share of the purchase price and comprised of approximately 262,000 additional square feet. In connection with these acquisitions, RioCan assumed mortgage financing of $16 million bearing interest at a weighted average interest rate of 3.7%.
During the six months ended June 30, 2016, RioCan completed acquisitions of interests in six income properties aggregating $143 million at a weighted average capitalization rate of 5.2%, representing RioCan’s share of the purchase price and comprised of approximately 320,000 additional square feet. In connection with these acquisitions, RioCan assumed mortgage financing of $21 million bearing interest at a weighted average interest rate of 4.0%.
Acquisitions Subsequent to Quarter End
RioCan acquired Canada Pension Plan Investment Board’s (“CPPIB “) interest in four properties that were previously co-owned. RioCan purchased CPPIB’s 50% interest in Grandview Corners (Surrey, BC), RioCan Meadows (Edmonton, AB), RioCan Beacon Hill (Calgary, AB), and RioCan Centre Burloak (Oakville, ON) at an aggregate purchase price of $352 million. RioCan did not assume any additional mortgage debt from CPPIB in connection with this acquisition.
RioCan acquired the remaining 25% interest in Chapman Mills Marketplace in Ottawa, Ontario from Trinity Developments at a purchase price of $36 million. In connection with the purchase price RioCan assumed approximately $18 million of the in place debt, which carries an interest rate of 3.9% and is scheduled to mature in 2018.
During the quarter ended June 30, 2016, we disposed of interests in five income properties aggregating $61 million representing a weighted average capitalization rate of 6.8%, comprised of approximately 489,000 square feet. The Trust’s mortgage obligations related to these properties was $13 million.
During the six months ended June 30, 2016, we disposed of interests in eight income properties aggregating $118 million representing a weighted average capitalization rate of 6.1%, comprised of approximately 679,000 square feet. The Trust’s mortgage obligations related to these properties was $29 million.
Canadian Same Store and Same Property NOI
|Three months ended
|Six months ended
|Same Store Growth (decline)||0.8%||(1.4%)||(0.1%)||(0.7%)|
|Same Property Growth (decline)||0.1%||(1.1%)||(1.0%)||(0.5%)|
|Refers to same store and same property NOI growth on a year over year basis.|
Canadian same store NOI increased 0.8% or $1.1 million during the Second Quarter compared to the same period in 2015 due to increased NOI (including re-leased space due to bankruptcies and lease cancellations), increased rent from renewals and rent steps, as well as increased percentage rents; partially offset by vacancies during the quarter.
Canadian same property NOI increased 0.1% this quarter primarily driven by the reasons cited above, as well as the completion of other development properties, partially offset by the disclaimed Target properties that have been in development since July 1, 2015.
NOI in Canada continues to benefit from higher property acquisition activity, net of disposals, primarily due to the acquisition of the increased ownership interests in 27 Kimco properties. In aggregate, acquisition and disposal activity generated an additional $8.0 million of Canadian NOI in the quarter.
The key performance indicators related to operating and leasing for the Canadian portfolio over the last eight quarters is as follows:
|% increase in average net rent per sq ft||3.3%||6.2%||4.0%||8.6%||9.5%||9.5%||11.8%||12.9%|
- Since Target’s departure, RioCan has made good progress towards leasing the vacated space and has successfully entered into either committed and conditional lease agreements, or is in advanced negotiations on leases that collectively represent approximately $13.1 million versus $11.4 million of total base rental revenue lost through Target’s departure (at RioCan’s proportionate share);
- Consistent with RioCan’s stated Canadian strategy, its portfolio is concentrated in Canada’s six major markets (consisting of Toronto, Ottawa, Calgary, Edmonton, Montreal and Vancouver). Assets in these markets contribute approximately 75.7% of RioCan’s Canadian annualized rental revenue as at June 30, 2016 (74.4% at June 30, 2015). The increase was driven by RioCan’s acquisition of Kimco share of assets located primarily in these six major markets; and
- The percentage of annualized rental revenue generated by national and anchor tenants in Canada increased to 84.6% of RioCan’s total annualized rental revenue as at June 30, 2016, as compared to 83.9% as at June 30, 2015.
As at June 30, 2016, RioCan had ownership interests in 15 development projects that represents approximately 5.9 million square feet upon completion (3.2 million square feet at RioCan’s interest). In addition to its development projects, RioCan continued its urban intensification activities, primarily in the Toronto, Ontario and Calgary, Alberta markets. In the first six months of 2016, RioCan transferred from properties under development to income producing properties $147 million in costs pertaining to 249,000 square feet of completed greenfield development or expansion and redevelopment projects.
RioCan REIT, Allied Properties REIT and Diamondcorp (collectively, “The Well JV”) entered into a binding agreement to sell the residential component of The Well to Tridel Builders Inc. and Woodbourne Canada Partners III (CA) LP for approximately $180 million, subject to certain closing conditions. Closing of the transaction is estimated to occur in early 2020. RioCan will remain a 50% co-owner of one of the rental buildings representing approximately 400,000 square feet of residential rental density.
The Well JV intends to initiate the development in early 2017, which will involve excavation of the site and construction of the entire underground parking and loading structure. Tridel and Woodbourne will participate in this and other phases of the construction and pay for their share of the underground parking spaces required for the residential component of The Well in accordance with an agreed formula. With the addition of the residential partners, the intention is to complete the entire development during one continuous construction period rather than a phased in approach. The sale is scheduled to close upon requisite land severances being granted and upon completion of the underground parking structure and building podiums.
RioCan has currently identified 46 properties that it considers to be strong possible intensification opportunities, all of which are in the six major markets and are typically located in the vicinity of substantive transit infrastructure. RioCan’s objective is to obtain the appropriate zoning and approval for approximately 10,000 residential units over the course of the next ten years. Given the early stage of the evolution of this strategy, there can be no assurance that all of these developments will be undertaken, and if they are, on what terms.
As at the date of this report, RioCan has obtained planning approvals for seven mixed use projects. If all planning permission requests — including those where approvals have been received and those where applications have been filed — are granted as applied for, a total of 12.4 million square feet of potential development is expected, which will include residential rental units held for long-term rental income, condominiums for sale that will, in most cases, be developed by third party partners through the sale of air rights and commercial gross leasable area. The mix between condominiums and rental residential may change over time depending on market conditions. The majority of these properties are located directly on, or in proximity, to major transit lines such as the existing Toronto Transit Commissions’ subway lines or The Crosstown Eglinton LRT line, which is currently under construction. The ability to intensify its existing retail properties into transit-oriented mixed use developments is indicative of both the locational attributes of RioCan’s land holdings and its development capabilities.
Liquidity and Capital
|Rolling 12 months ended|
|June 30, 2016||December 31, 2015|
|Interest coverage – RioCan’s proportionate share||3.11x||3.07x|
|Debt service coverage – RioCan’s proportionate share||2.42x||2.37x|
|Fixed charge coverage – RioCan’s proportionate share||1.11x||1.11x|
|Debt to Adjusted EBITDA – RioCan’s proportionate share||8.17x||8.34x|
|Operating debt to Operating EBITDA – RioCan’s proportionate share||7.73x||7.93x|
|Unencumbered assets (millions) (i)||$5,383||$3,321|
|% of NOI generated from unencumbered assets (i)||44%||25%|
|Unencumbered assets to unsecured debt (i)||256%||166%|
|Coverage metrics include results from both continuing and discontinued operations except for (i) which is calculated on a continuing operations basis.|
Financing Highlights for the Second Quarter
During the quarter, RioCan added a new $1 billion unsecured operating credit facility (“Operating Facility”), which replaced RioCan’s secured operating credit facilities. The Operating Facility will mature in May, 2021, and provides for a mechanism to extend the facility on an annual basis. The Operating Facility enabled RioCan to unencumber 24 properties that were previously used as collateral support for the former secured credit facilities. As at June 30, 2016 RioCan’s unencumbered asset pool increased to $5.4 billion, representing 256% of RioCan’s unsecured debt. As at June 30, 2016, $891 million of the credit facility was undrawn.
RioCan’s Unaudited Interim Consolidated Financial Statements and Management’s Discussion and Analysis for the three and six months ended June 30, 2016 is available on RioCan’s website at www.riocan.com.
Conference Call and Webcast
Interested parties are invited to participate in a conference call with management on Friday July 29, 2016 at 10:00 a.m. Eastern time. You will be required to identify yourself and the organization on whose behalf you are participating.
In order to participate, please dial 416-340-2218 or 1-866-223-7781. If you cannot participate in the live mode, a replay will be available until August 26, 2016. To access the replay, please dial 905-694-9451 or 1-800-408-3053 and enter passcode 1111250#.
Scheduled speakers include Edward Sonshine, O.Ont. Q.C., Chief Executive Officer, Rags Davloor, President and Chief Operating Officer and Cynthia Devine, Executive Vice President, Chief Financial Officer and Corporate Secretary. Management’s presentation will be followed by a question and answer period. To ask a question, press “star 1” on a touch-tone phone. The conference call operator will be notified of all requests in the order in which they are made, and will introduce each questioner.
Alternatively, to access the simultaneous webcast, go to the following link on RioCan’s website http://investor.riocan.com/investor-relations/events-and-presentations/events/ and click on the link for the webcast. The webcast will be archived 24 hours after the end of the conference call and can be accessed for 120 days.
RioCan is Canada’s largest real estate investment trust with a total enterprise value of approximately $15 billion as at June 30, 2016. RioCan owns and manages Canada’s largest portfolio of shopping centres with ownership interests in a portfolio of 302 Canadian retail and mixed use properties, including 15 properties under development, containing an aggregate net leasable area of 45 million square feet. For further information, please refer to RioCan’s website at www.riocan.com.
RioCan’s consolidated financial statements are prepared in accordance with IFRS. Consistent with RioCan’s management framework, management uses certain financial measures to assess RioCan’s financial performance, which are not generally accepted accounting principles (GAAP) under IFRS. The following measures, RioCan’s Interest, Funds From Operations (“FFO”), Operating Funds From Operations (“Operating FFO”), Adjusted Funds From Operations (“AFFO”), and Adjusted Earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”), Operating EBITDA, Interest Coverage Ratio, Debt Service Coverage Ratio, Debt to Operating EBITDA, Operating Income (“NOI”), Same Store NOI, Same Property NOI, Total Enterprise Value, and RioCan’s Proportionate Share as well as other measures discussed elsewhere in this release, do not have a standardized definition prescribed by IFRS and are, therefore, unlikely to be comparable to similar measures presented by other reporting issuers. RioCan uses these measures to better assess the Trust’s underlying performance and provides these additional measures so that investors may do the same. Non GAAP measures should not be considered as alternatives to net earnings or comparable metrics determined in accordance with IFRS as indicators of RioCan’s performance, liquidity, cash flow, and profitability. For a full definition of these measures, please refer to the “Use of Non-GAAP Measures” in RioCan’s second quarter 2016 Management Discussion and Analysis.
This news release contains forward-looking information within the meaning of applicable Canadian securities laws. This information includes, but is not limited to, statements made in “Financial Highlights”, “Corporate Developments”, “Portfolio Activity”, “Operational Highlights”, “Development Activities”, Liquidity and Capital” and other statements concerning RioCan’s objectives, its strategies to achieve those objectives, as well as statements with respect to management’s beliefs, plans, estimates, and intentions, and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Forward-looking information generally can be identified by the use of forward-looking terminology such as “outlook”, “objective”, “may”, “will”, “would”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “should”, “plan”, “continue”, or similar expressions suggesting future outcomes or events. Such forward-looking information reflects management’s current beliefs and is based on information currently available to management. All forward-looking information in this News Release is qualified by these cautionary statements.
Forward-looking information is not a guarantee of future events or performance and, by its nature, is based on RioCan’s current estimates and assumptions, which are subject to numerous risks and uncertainties, including those described under “Risks and Uncertainties” in RioCan’s Management’s Discussion and Analysis for the period ended June 30, 2016 (“MD&A”), which could cause actual events or results to differ materially from the forward-looking information contained in this News Release. Those risks and uncertainties include, but are not limited to, those related to: liquidity and general market conditions; tenant concentrations and related risk of bankruptcy or restructuring (and the terms of any bankruptcy or restructuring proceeding), occupancy levels and defaults, including the failure to fulfill contractual obligations by the tenant or a related party thereof; lease renewals and rental increases; the ability to re-lease and find new tenants for vacant space; retailer competition; access to debt and equity capital; interest rate and financing risk; joint ventures and partnerships; the relative illiquidity of real property; unexpected costs or liabilities related to acquisitions and dispositions; development risk associated with construction commitments, project costs and related approvals; environmental matters; litigation; reliance on key personnel; unitholder liability; income and indirect taxes; and credit ratings.
RioCan currently qualifies as a real estate investment trust for Canadian tax purposes and intends to qualify for future years. The Income Tax Act (Canada) contains provisions which potentially impose tax on publicly traded trusts that qualify as specified investment flow-through entities (the SIFT Provisions). However, the SIFT Provisions do not impose tax on a publicly traded trust which qualifies as a REIT. Should RioCan no longer qualify as a Canadian REIT under the SIFT Provisions, certain statements contained in this News Release may need to be modified. RioCan is still subject to Canadian tax in its incorporated Canadian subsidiaries.
Our U.S. subsidiary qualified as a REIT for U.S. income tax purposes up to May 25, 2016, subsequent to the closing date of the sale of our U.S. property portfolio. The subsidiary distributed all of its U.S. taxable income and is entitled to deduct such distributions for U.S. income tax purposes. The subsidiary’s qualification as a REIT depends on the REIT’s satisfaction of certain asset, income, organizational, distribution, unitholder ownership and other requirements on a continuing basis. The subsidiary qualified as a U.S. REIT up to the closing of the sale of our U.S. asset portfolio. Our U.S. subsidiary is subject to a 30% or 35% withholding tax on distributions to Canada. We expect to deduct U.S. withholding taxes paid or payable, if any, related to the disposition proceeds.
Other factors, such as general economic conditions, including interest rate and foreign exchange rate fluctuations, may also have an effect on RioCan’s results of operations. Material factors or assumptions that were applied in drawing a conclusion or making an estimate set out in the forward-looking information may include, but are not limited to: a stable retail environment; relatively low and stable interest costs; a continuing trend toward land use intensification, including residential development in urban markets; access to equity and debt capital markets to fund, at acceptable costs, future capital requirements and to enable our refinancing of debts as they mature; and the availability of investment opportunities for growth. For a description of additional risks that could cause actual results to materially differ from management’s current expectations, see “Risks and Uncertainties” in RioCan’s MD&A in its 2015 Annual Report and for the period ended June 30, 2016, and in “Risks and Uncertainties” in RioCan’s most recent Annual Information Form. Although the forward-looking information contained in this News Release is based upon what management believes are reasonable assumptions, there can be no assurance that actual results will be consistent with this forward-looking information. Certain statements included in this News Release may be considered “financial outlook” for purposes of applicable Canadian securities laws, and as such the financial outlook may not be appropriate for purposes other than this News Release. The forward-looking information contained in this News Release is made as of the date of this News Release, and should not be relied upon as representing RioCan’s views as of any date subsequent to the date of this News Release.
Management undertakes no obligation, except as required by applicable law, to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise.
Cynthia J. Devine
Executive Vice President, Chief Financial Officer
and Corporate Secretary