BTB REIT reports record performance with a 25.0% increase in net operating income, a 12.2% improvement in the average lease renewal rate and rental revenue up 19.1% for the year 2022.

                      i.       

Fourth Quarter 2022: Leases representing 154,032 square feet were renewed during this quarter resulting in an average renewal rate of 80.0% for the quarter. BTB also completed 49,568 square feet of new transactions during the quarter.

                     ii.       

For the year 2022: Total leasing activity for the year 2022 represents 672,791 square feet, consisting of 505,189 square feet of lease renewals and 167,602 square feet of new leases. The increase in the average renewal rate for the cumulative 12-month period was 12.2% across all of its lines of business.

____________________________

⁽¹⁾      Non-IFRS financial measure. See Appendix 1.

⁽²⁾      Credit facilities is a term used that reconciles with the bank loans as presented and defined in the Trust’s consolidated financial statements and accompanying notes.

Periods ended December 31

Quarter

Year

(in thousands of dollars, except for ratios and per unit data)

2022

∆

2022

2021

∆

$

$

%

$

$

%

FINANCIAL INFORMATION

Rental revenue

31,486

26,789

17.5

119,495

100,343

19.1

Net operating income (NOI)

18,624

14,776

26.0

70,430

56,336

25.0

Net income and comprehensive income

1,769

23,219

(92.4)

38,154

41,568

(8.2)

Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) ⁽¹⁾

16,347

13,435

21.7

64,409

51,999

23.9

NOI from the same-property portfolio ⁽¹⁾

13,840

12,924

7.1

52,462

50,737

3.4

Distributions

6,413

5,578

15.0

25,032

21,464

16.6

Recurring funds from operations (FFO) ⁽¹⁾

10,059

8,194

22.8

37,879

30,144

25.7

Recurring adjusted funds from operations (AFFO) ⁽¹⁾

8,550

6,962

22.8

34,137

27,568

23.8

Cash flow from operating activities (IFRS)

18,961

25,137

(24.6)

66,240

56,538

17.2

Total assets

1,179,340

1,129,901

4.3

Total debt ratio ⁽¹⁾

58.5 %

60.5 %

(2.0)

Weighted average interest rate on mortgage debt

4.09 %

3.49 %

0.6

Market capitalization

311,120

302,438

2.8

FINANCIAL INFORMATION PER UNIT

Net income and comprehensive income

2.1¢

31.2¢

-29.1¢

45.7¢

58.1¢

-12.4¢

Distributions

7.5¢

7.5¢

0.0¢

30.0¢

30.0¢

0.0¢

Recurring FFO ⁽¹⁾

11.8¢

11.0¢

0.8¢

45.4¢

42.1¢

3.3¢

Recurring AFFO ⁽¹⁾

10.0¢

9.4¢

0.6¢

40.9¢

38.5¢

2.4¢

⁽¹⁾         Non-IFRS financial measure. See Appendix 1.

Periods ended December 31

Quarter

Year

(in thousands of dollars, except per unit data)

2022

2022

2021

$

$

$

$

CASH FLOWS FROM OPERATING ACTIVITIES (IFRS)

18,961

25,137

66,240

56,538

Leasing payroll expenses

682

208

1,243

784

Transaction costs on disposition of investment properties and mortgage early repayment fees

(627)

(109)

(1,611)

(297)

Adjustments for changes in other working capital items

(2,523)

(11,604)

(1,293)

(3,934)

Financial income

225

158

624

739

Interest expenses

(7,706)

(5,940)

(28,450)

(22,693)

Provision for non-recoverable capital expenditures ⁽¹⁾

(630)

(539)

(2,390)

(2,007)

Provision for non-recovered rental fees ⁽¹⁾

(375)

(375)

(1,500)

(1,500)

Accretion of non-derivative liability component of convertible debentures

(84)

(84)

(337)

(360)

AFFO ⁽¹⁾

7,923

6,853

32,526

27,271

627

109

1,611

297

RECURRING AFFO ⁽¹⁾

8,550

6,962

34,137

27,568

⁽¹⁾         Non-IFRS financial measure. See Appendix 1.

TIME:

9 am, Eastern Time

URL ENTRY:

https://bit.ly/3HcRj1l

DIAL:

Local: 1-416-764-8688

North America (toll-free): 1-888-390-0546

WEB:

https://app.webinar.net/L6MOaEMaJN5

VISUAL:

A presentation will be uploaded on BTB’s website prior to the call

https://bit.ly/3IaJ9pj

NON-IFRS MEASURES

DEFINITION

SAME-PROPERTY NOI

Same-property NOI is a non-IFRS financial measure defined as net operating income (“NOI”) for the properties that the Trust owned and operated for the entire duration of both the current year and the previous year. The most directly comparable IFRS measure to same-property NOI is Operating Income.

FUNDS FROM OPERATIONS (FFO)

& RECURRING FFO

FFO is a non-IFRS financial measure used by most Canadian real estate investment trusts based on a standardized definition established by REALPAC in its January 2022 White Paper (“White Paper”). FFO is defined as net income and comprehensive income less certain adjustments, on a proportionate basis, including (i) fair value adjustments on investment properties, class B LP units and derivative financial instruments; (ii) amortization of lease incentives; (iii) incremental leasing costs; and (iv) distribution on class B LP units. FFO is reconciled to net income and comprehensive income, which is the most directly comparable IFRS measure. FFO is also reconciled with the cash flows from operating activities, which is an IFRS measure.

Recurring FFO is also a non-IFRS financial measure that starts with FFO and removes the impact of non-recurring items such as transaction cost on acquisitions and dispositions of investment properties and early repayment fees.

The Trust believes FFO and recurring FFO are key measures of operating performance and allow the investors to compare its historical performance.

ADJUSTED FUNDS FROM OPERATIONS (AFFO)

& RECURRING AFFO

AFFO is a non-IFRS financial measure used by most Canadian real estate investment trusts based on a standardized definition established by REALPAC in its January 2022 White Paper (“White Paper”). AFFO is defined as FFO less: (i) straight-line rental revenue adjustment; (ii) accretion of effective interest; (iii) amortization of other property and equipment; (iv) unit-based compensation expenses; (v) provision for non-recoverable capital expenditures; and (vi) provision for unrecovered rental fees (related to regular leasing expenditures). AFFO is reconciled to net income and comprehensive income, which is the most directly comparable IFRS measure. AFFO is also reconciled with the cash flows from operating activities, which is an IFRS measure.

Recurring AFFO is also a non-IFRS financial measure that starts with AFFO and removes the impact of non-recurring items such as transaction costs on acquisitions and dispositions of investment properties and early repayment fees.

The Trust considers AFFO and recurring AFFO to be useful measures of recurring economic earnings and relevant in understanding its ability to service its debt, fund capital expenditures, and provide distributions to unitholders.

FFO & AFFO PAYOUT RATIOS

AND

RECURRING FFO & RECURRING AFFO PAYOUT RATIOS

FFO and AFFO payout ratios and recurring FFO and recurring AFFO payout ratios are non-IFRS financial measures. These payout ratios are calculated by dividing the actual distributions per unit by FFO, AFFO, and recurring FFO and recurring AFFO per unit in each period.

The Trust considers these metrics a useful way to evaluate its distribution paying capacity.

TOTAL DEBT RATIO

The total debt ratio is a non-IFRS financial measure of the Trust’s financial leverage, which is calculated by taking the total long-term debt less cash divided by the total gross value of the assets of the Trust less cash.

The Trust considers this metric useful as it indicates its ability to meet its debt obligations and its capacity for future additional acquisitions.

PROVISION FOR

NON-RECOVERABLE CAPITAL EXPENDITURES

In calculating AFFO, the Trust deducts a provision for non-recoverable capital expenditures to consider capital expenditures invested to maintain the condition of its properties and to preserve rental revenue.

The provision for non-recoverable capital expenditures is calculated based on 2% of rental revenues. This provision is based on management’s assessment of industry practices and its investment forecasts for the coming years.

PROVISION FOR UNRECOVERED RENTAL FEES

The Trust also deducts a provision for unrecovered rental fees in the amount of approximately 25¢ per sq. ft. on an annualized basis. Even though quarterly rental fee disbursements vary significantly from one quarter to another, management considers that this provision fairly presents, in the long term, the average disbursements not recovered directly in establishing the rent that the Trust will undertake. These disbursements consist of inducements paid or granted when leases are signed that are generally amortized over the term of the lease and are subject to an equivalent increase in rent per square foot, and of brokerage commissions and leasing payroll expenses.

TOTAL LONG-TERM DEBT LESS CASH AND CASH EQUIVALENTS

This is a non-IFRS financial measure. Long-term debt less cash and cash equivalent is a non-IFRS financial measure, calculated as the total of (i) fixed-rate mortgage loans payable; (ii) floating rate mortgage loans payable; (iii) Series G debenture capital amount; (iv) Series F debenture capital adjusted with non-derivative component fewer conversion options exercised by holders; and (v) credit facilities, less cash, and cash equivalents. The most directly comparable IFRS measure to net debt is debt.

TOTAL GROSS VALUE OF THE ASSETS OF THE TRUST LESS CASH AND CASH EQUIVALENT

This is a non-IFRS financial measure. Gross value of the assets of the Trust less cash and cash equivalent (“GVALC”) is a non-IFRS financial measure defined as the Trust’s total assets adding the cumulated amortization property and equipment and removing the cash and cash equivalent. The most directly comparable IFRS measure to GVALC is total assets.

2022

Q-4

2022

Q-3

2022

Q-2

2022

Q-1

2021

Q-4

2021

Q-3

2021

Q-2

2021

Q-1

(in thousands of dollars, except for per unit)

$

$

$

$

$

$

$

$

Net income and comprehensive income (IFRS)

1,769

11,693

18,243

6,449

23,219

8,678

7,161

2,510

Fair value adjustment on investment properties

7,781

1,230

197

(1,007)

(19,571)

–

–

–

Fair value adjustment on Class B LP units

160

(142)

(233)

66

21

(18)

(52)

280

Amortization of lease incentives

787

773

818

735

858

780

777

877

Fair value adjustment on derivative financial instruments

(1,971)

(3,898)

(9,344)

997

3,297

(2,598)

733

1,814

Leasing payroll expenses ⁽⁶⁾ 

682

182

158

221

208

173

184

219

Distributions – Class B LP units

26

26

26

26

30

22

26

30

Unit-based compensation (Unit price remeasurement) ⁽⁵⁾

198

(172)

(285)

77

23

(19)

185

–

FFO ⁽¹⁾

9,432

9,692

9,580

7,564

8,085

7,018

9,014

5,730

Non-recurring item

Transaction cost on dispositions of investment properties and mortgage early repayment fees

627

93

138

753

109

–

188

–

Recurring FFO ⁽¹⁾

10,059

9,785

9,718

8,317

8,194

7,018

9,202

5,730

FFO per unit ^{(1) (2) (3)}

11.0¢

11.4¢

11.3¢

9.7¢

10.9¢

9.5¢

12.3¢

8.9¢

Recurring FFO per unit ^{(1) (2) (4)}

11.8¢

11.5¢

11.4¢

10.7¢

11.0¢

9.5¢

12.5¢

8.9¢

FFO payout ratio ⁽¹⁾

67.9 %

65.9 %

66.4 %

77.2 %

68.9 %

79.0 %

61.1 %

84.0 %

Recurring FFO payout ratio ⁽¹⁾

63.6 %

65.2 %

65.5 %

70.2 %

68.0 %

79.0 %

59.9 %

84.0 %

⁽¹⁾         

This is a non-IFRS financial measure.

⁽²⁾         

Including Class B LP units.

⁽³⁾         

The FFO per unit ratio is calculated by dividing the FFO ⁽¹⁾ by the Trust’s unit outstanding at the end of the period (including the Class B LP units at outstanding at the end of the period).

⁽⁴⁾         

The recurring FFO per unit ratio is calculated by dividing the recurring FFO ⁽¹⁾ by the Trust’s unit outstanding at the end of the period (including the Class B LP units at outstanding at the end of the period).

⁽⁵⁾         

The impact of the unit price remeasurement on the deferred unit-based compensation plan has been considered in the calculation of the recurring FFO and AFFO starting Q2 2021.

⁽⁶⁾         

The impact of the CIO compensation, hired in Q2 2022, was added to the Leasing payroll expenses during Q4 2022 as his duties were mainly leasing activities throughout the year.

2022

Q-4

2022

Q-3

2022

Q-2

2022

Q-1

2021

Q-4

2021

Q-3

2021

Q-2

2021

Q-1

(in thousands of dollars, except for per unit)

$

$

$

$

$

$

$

$

FFO ⁽¹⁾

9,432

9,692

9,580

7,564

8,085

7,018

9,014

5,730

Straight-line rental revenue adjustment

(1,077)

(521)

(74)

(150)

(758)

(88)

(91)

(397)

Accretion of effective interest

336

219

284

288

275

239

428

359

Amortization of other property and equipment

31

35

26

30

22

23

27

15

Unit-based compensation expenses

206

130

312

73

143

114

(24)

644

Provision for non-recoverable capital expenditures ⁽¹⁾

(630)

(599)

(580)

(581)

(539)

(478)

(519)

(471)

Provision for unrecovered rental fees ⁽¹⁾ 

(375)

(375)

(375)

(375)

(375)

(375)

(376)

(374)

AFFO ⁽¹⁾

7,923

8,581

9,173

6,849

6,853

6,453

8,459

5,506

Non-recurring item

Transaction cost on dispositions of investment properties and mortgage early repayment fees

627

93

138

753

109

–

188

–

Recurring AFFO ⁽¹⁾

8,550

8,674

9,311

7,602

6,962

6,453

8,647

5,506

AFFO per unit ^{(1) (2) (3)}

9.3¢

10.1¢

10.8¢

8.8¢

9.2¢

8.7¢

11.5¢

8.6¢

Recurring AFFO per unit ^{(1) (2) (4)}

10.0¢

10.2¢

11.0¢

9.7¢

9.4¢

8.7¢

11.8¢

8.6¢

AFFO payout ratio ⁽¹⁾

80.8 %

74.4 %

69.4 %

85.3 %

81.3 %

85.9 %

65.1 %

87.4 %

Recurring AFFO payout ratio ⁽¹⁾

74.9 %

73.6 %

68.3 %

76.8 %

80.0 %

85.9 %

63.7 %

87.4 %

⁽¹⁾         

This is a non-IFRS financial measure.

⁽²⁾         

Including Class B LP units.

⁽³⁾         

The AFFO per unit ratio is calculated by dividing the AFFO ⁽¹⁾ by the Trust’s unit outstanding at the end of the period (including the Class B LP units at outstanding at the end of the period).

⁽⁴⁾         

The recurring AFFO per unit ratio is calculated by dividing the recurring AFFO ⁽¹⁾ by the Trust’s unit outstanding at the end of the period (including the Class B LP units at outstanding at the end of the period).

(in thousands of dollars)

December 31, 2022

December 31, 2021

$

$

Cash and cash equivalents

(2,404)

(7,191)

Mortgage loans outstanding ⁽¹⁾

638,441

607,038

Convertible debentures ⁽¹⁾  

43,170

44,564

Credit facilities

9,897

35,468

Total long-term debt less cash and cash equivalents ^{(2) (3)}

689,104

679,879

Total gross value of the assets of the Trust less cash and cash equivalents ^{(2) (4)}

1,178,049

1,124,690

Mortgage debt ratio (excluding convertible debentures and credit facilities) ^{(2) (5)}

54.2 %

54.0 %

Debt ratio – convertible debentures ^{(2) (6)}  

3.7 %

4.0 %

Debt ratio – credit facilities ^{(2) (7)}

0.8 %

3.2 %

Total debt ratio ⁽²⁾

58.5 %

60.5 %

⁽¹⁾         

Before unamortized financing expenses and fair value assumption adjustments.

⁽²⁾         

This is a non-IFRS financial measure.

⁽³⁾         

Long-term debt cash and cash equivalents is a non-IFRS financial measure, calculated as total of: (i) fixed rate mortgage loans payable; (ii) floating rate mortgage loans payable; (iii) Series G debenture capital amount; (iv) Series F debenture capital adjusted with non-derivative component less conversion options exercised by holders; and (v) credit facilities, less cash and cash equivalents. The most directly comparable IFRS measure to net debt is debt.

⁽⁴⁾         

Gross value of the assets of the Trust less cash and cash equivalent (GVALC) is a non-IFRS financial measure defined as the Trust total assets adding the cumulated amortization property and equipment and removing the cash and cash equivalent. The most directly comparable IFRS measure to GVALC is total assets.

⁽⁵⁾         

Mortgage debt ratio is calculated by dividing the mortgage loans outstanding by the GVALC.

⁽⁶⁾         

Debt ratio – convertible debentures is calculated by dividing the convertible debentures by the GVALC.

⁽⁷⁾         

Debt ratio – credit facilities is calculated by dividing the credit facilities by the GVALC.