First Capital Realty Announces 2009 Year End Results

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First Capital Realty Announces 2009 Year End Results

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^{Published on 2010-03-11 16:05:09}YEAR HIGHLIGHTS $ millions Year Ended December 31 2009 2008 Enterprise value $ 4,508 $ 4,111 Debt to aggregate assets 50.3% 53.5% Debt to total market capitalization 45.9% 52.6% Property rental revenue $ 442.1 $ 410.2 Net operating income (NOI) $ 285.2 $ 261.0 Year Ended December 31 $ millions per share 2009 2008 2009 2008 Funds from operations (FFO) - Core Operations $ 144.4 $ 133.3 $ 1.54 $ 1.53 FFO - EQY and Other Non-Recurring Items(1) $ 7.6 $ 12.6 $ 0.08 $ 0.14 Total FFO $ 152.0 $ 145.9 $ 1.62 $ 1.67 Weighted average diluted shares for FFO (000's) 93,869 87,260 Adjusted funds from operations (AFFO) - Core Operations $ 143.4 $ 132.3 $ 1.40 $ 1.38 AFFO - EQY and Other Non-Recurring Items(1) $ 8.4 $ 8.4 $ 0.08 $ 0.09 Total AFFO $ 151.8 $ 140.7 $ 1.48 $ 1.47 Weighted average diluted shares for AFFO (000's) 102,935 95,587 (1) Excludes the Company's share of Equity One's non cash impairment loss and dilution gain (losses). See Funds from Operations section of this press release. 2009 HIGHLIGHTS - Invested $285 million in development activities, property improvements and acquisitions - Added 1.0 million square feet of gross leasable area from development and redevelopment coming on line, and acquisitions - Acquired five income-producing properties totalling 225,000 square feet, two properties adjacent to existing shopping centres totalling 31,000 square feet, one land site and four land parcels adjacent to existing properties comprising a total of 9.7 acres - 6.8% same property NOI growth; 2.7% excluding redevelopment and expansion space - 13.1% increase on rate per square foot on 1.2 million square feet of renewal leases - Occupancy of 96.2% compares to 96.0% at September 30, 2009 and 96.4% at December 31, 2008. Vacancy includes 0.7% of space held for redevelopment - Gross new leasing totalled 1.2 million square feet including development and redevelopment coming on line; lease closures totalled 632,000 square feet and closures for redevelopment totalled 174,000 square feet - Average lease rate per occupied square foot increased by 3.6% from December 31, 2008 to $15.71 at December 31, 2009. - Completed new leasing on existing space totalling 493,000 square feet at an average rate of $18.89 per square foot, representing a 20.4% increase over expiring rates - Completed approximately $1.1 billion of financing activities - Completed dividend-in-kind transaction resulting in the Company no longer having an ownership interest in Equity One effective August 14, 2009. FOURTH QUARTER HIGHLIGHTS Three Months $ millions per share Ended December 31 2009 2008 2009 2008 Property rental revenue $ 113.2 $ 105.7 Net operating income (NOI) $ 73.7 $ 67.9 FFO - Core Operations $ 36.7 $ 35.9 $ 0.38 $ 0.40 FFO - EQY and Other Non-Recurring Items(1) $ (0.5) $ 2.1 $ (0.01) $ 0.02 Total FFO $ 36.2 $ 38.0 $ 0.37 $ 0.42 Weighted average diluted shares for FFO (000's) 97,007 90,424 AFFO - Core Operations $ 35.0 $ 34.5 $ 0.33 $ 0.35 AFFO - EQY and Other Non-Recurring Items(1) $ 3.7 $ 3.2 $ 0.03 $ 0.03 Total AFFO $ 38.7 $ 37.7 $ 0.36 $ 0.38 Weighted average diluted shares for AFFO (000's) 108,947 99,053 (1) Excludes the Company's share of Equity One's non cash impairment loss and dilution gain on Equity One investment. See Funds from Operations section of this press release. FOURTH QUARTER 2009 OPERATING HIGHLIGHTS - Invested $88 million in development activities, property improvements and acquisitions - Added 271,000 square feet of gross leasable area from development and redevelopment coming on line and acquisitions - Acquired one income-producing property totalling 80,000 square feet, two properties adjacent to existing shopping centres totalling 31,000 square feet and two land parcels adjacent to existing properties for future development - 5.9% same property NOI growth; 3.2% excluding redevelopment and expansion space - 17.7% increase on 382,000 square feet of renewal leases - Gross new leasing totalled 266,000 square feet including development and redevelopment coming on line; lease closures totalled 81,000 square feet and closures for redevelopment totalled 49,000 square feet - $450 million secured revolving credit facility maturing March 2012 with a syndicate of ten banks jointly led by RBC Capital Markets, TD Securities, and BMO Capital Markets. The new facility was used to replace the Company's existing three year $350 million senior unsecured revolving credit facility, which had a maturity date of March 2010. - $75 million secured revolving credit facility with the Bank of Nova Scotia maturing January 2012. - $187.3 million from thirteen secured financing transactions at a weighted average interest rate of 6.21% and a weighted average term to maturity of 8.5 years. - $75 million principal amount of 6.25% cashless convertible unsecured subordinated debentures maturing December 2016 at a conversion price of $22.90 per common share. The Company's convertible debentures are considered to be cashless as it is the current intention of the Company to satisfy its obligations to pay principal and interest on its convertible debentures by the issuance of common shares. - $125 million principal amount senior unsecured debentures, Series G, with 5.95% interest rate maturing June, 2015. The Company subsequently reduced the availability of the syndicated secured revolving credit facility to $375 million and unwound $20 million notional principle amount of hedges. - $50 million principal amount of 5.70% cashless convertible unsecured subordinated debentures maturing June 2017 at a conversion price of $30.00 per common share. The Company's convertible debentures are considered to be cashless as it is the current intention of the Company to satisfy its obligations to pay principal and interest on its convertible debentures by the issuance of common shares. The Company further reduced the availability of the syndicated secured revolving credit facility to $285 million. - $1.5 million of unamortized deferred financing costs were recorded as a loss on settlement of debt in Q4, 2009 as a result of the reductions of the syndicated revolving credit facility. The Company also recorded a net loss on the settlement of hedges totalling $1.2 million. - Subsequent to year end, the Company completed $125 million principal amount senior unsecured debentures, Series H, with 5.85% interest rate maturing January, 2017. The Company further reduced the availability of the syndicated secured revolving credit facility to $250 million. The Company also reduced its $75 million secured revolving credit facility to $50 million. - $0.5 million of unamortized deferred financing costs will be recorded as a loss on settlement of debt in Q1, 2010 as a result of the reductions of the revolving credit facilities. In addition, the Company completed the following equity issuances in the twelve months ended December 31, 2009: - On February 17, 2009 the Company issued 1.4 million common shares to acquire 1.8 million shares of Allied Properties REIT at a ratio of 0.81 First Capital Realty shares per Allied Properties REIT Trust Unit. - The Company issued 772,000 common shares as payment of the interest due to holders of the 5.50% cashless convertible debentures. - Convertible debentures totalling $6.3 million in principal were converted at the option of the holder at a conversion price of $27.00 per common share resulting in the issuance of approximately 231,000 common shares. - In 2009, the Company raised gross proceeds of $59 million of equity issuing 3.45 million common shares (including 2.3 million warrants) through an equity offering at an average gross price of $17.10 per share Year Ended December 31(per share) 2009 2008 Regular dividends $ 1.28 $ 1.28 Dividend-in-kind 0.45 - Total Dividends $ 1.73 $ 1.28Funds from Operations (FFO) (thousands of dollars, except per share amounts) Year ended December 31, 2009 FFO - EQY and Other Non- FFO - Core recurring Operations Items Total FFO Net operating income $ 285,177 $ - $ 285,177 Interest expense - Canadian operations (120,101) - (120,101) Interest expense - US operations - (5,364) (5,364) Corporate expense (22,122) - (22,122) Interest and other income 5,612 - 5,612 Other (losses) gains and (expenses) - (1,475) (1,475) Funds from operations from Equity One(3) - 15,009 15,009 Amortization of non-real estate assets (4,207) - (4,207) Current income taxes - (533) (533) FFO(2) 144,359 7,637 151,996 Add: the Company's share of Equity One's non-cash impairment loss - - - Add: Dilution (loss) gain on Equity One investment - (676) (676) FFO - Realpac 144,359 6,961 151,320 FFO per diluted share $ 1.54 $ 0.08 $ 1.62 Add: the Company's share of Equity One's non-cash impairment loss - - - Add: Dilution (loss) gain on Equity One investment - (0.01) (0.01) FFO per diluted share - Realpac $ 1.54 $ 0.07 $ 1.61 Weighted average diluted shares - FFO 93,868,815 93,868,815 93,868,815 (thousands of dollars, except per share amounts) Year ended December 31, 2008 FFO - EQY and Other Non- FFO - Core recurring Operations Items Total FFO Net operating income $ 261,040 $ - $ 261,040 Interest expense - Canadian operations (105,541) - (105,541) Interest expense - US operations - (8,144) (8,144) Corporate expense (21,577) - (21,577) Interest and other income 1,559 - 1,559 Other (losses) gains and (expenses) - 2,752 2,752 Funds from operations from Equity One(3) - 20,005 20,005 Amortization of non-real estate assets (2,159) - (2,159) Current income taxes - (1,985) (1,985) FFO(2) 133,322 12,628 145,950 Add: the Company's share of Equity One's non-cash impairment loss - (7,503) (7,503) Add: Dilution (loss) gain on Equity One investment - 2,898 2,898 FFO - Realpac 133,322 8,023 141,345 FFO per diluted share $ 1.53 $ 0.14 $ 1.67 Add: the Company's share of Equity One's non-cash impairment loss - (0.09) (0.09) Add: Dilution (loss) gain on Equity One investment - 0.04 0.04 FFO per diluted share - Realpac $ 1.53 $ 0.09 $ 1.62 Weighted average diluted shares - FFO 87,260,224 87,260,224 87,260,224 (thousands of dollars, except per share amounts) Three months ended December 31, 2009 FFO - EQY and Other Non- FFO - Core recurring Operations Items Total FFO Net operating income $ 73,708 $ - $ 73,708 Interest expense - Canadian operations (32,343) - (32,343) Interest expense - US operations - - - Corporate expense (5,801) - (5,801) Interest and other income 2,549 - 2,549 Other (losses) gains and (expenses) - (2,165) (2,165) Funds from operations from Equity One - - - Amortization of non-real estate assets (1,451) - (1,451) Current income taxes - 1,662 1,662 FFO(2) 36,662 (503) 36,159 Add: the Company's share of Equity One's non-cash impairment loss - - - Add: Dilution gain on Equity One investment - - - FFO - Realpac $ 36,662 $ (503) $ 36,159 FFO per diluted share $ 0.38 $ (0.01) $ 0.37 Add: the Company's share of Equity One's non-cash impairment loss - - - Add: Dilution gain on Equity One investment - - - FFO per diluted share - Realpac $ 0.38 $ (0.01) $ 0.37 Weighted average diluted shares - FFO 97,007,411 97,007,411 97,007,411 (thousands of dollars, except per share amounts) Three months ended December 31, 2008(1) FFO - EQY and Other Non- FFO - Core recurring Operations Items Total FFO Net operating income $ 67,911 $ - $ 67,911 Interest expense - Canadian operations (26,177) - (26,177) Interest expense - US operations - (2,444) (2,444) Corporate expense (5,614) - (5,614) Interest and other income 347 - 347 Other (losses) gains and (expenses) - (613) (613) Funds from operations from Equity One - 4,776 4,776 Amortization of non-real estate assets (592) - (592) Current income taxes - 380 380 FFO(2) 35,875 2,099 37,974 Add: the Company's share of Equity One's non-cash impairment loss - (1,023) (1,023) Add: Dilution gain on Equity One investment - 2,898 2,898 FFO - Realpac $ 35,875 $ 3,974 $ 39,849 FFO per diluted share $ 0.40 $ 0.02 $ 0.42 Add: the Company's share of Equity One's non-cash impairment loss - (0.01) (0.01) Add: Dilution gain on Equity One investment - 0.03 0.03 FFO per diluted share - Realpac $ 0.40 $ 0.04 $ 0.44 Weighted average diluted shares - FFO 90,423,576 90,423,576 90,423,576 (1) Prior year comparative figures have been restated for a change in accounting standards. (2) Excluding Equity One's non-cash impairment loss and dilution gains and losses on the Equity One investment. (3) To August 14, 2009.Year ended Three months ended ($ in thousands) December 31 December 31 2009 2008 2009 2008 (Losses) gains on debt extinguishment (2,394) 438 (1,497) 438 Realized loss on termination of hedges (1,160) - (1,181) - Unrealized loss on interest rate swaps not designated as hedges (1,203) - (1,203) - Gains (losses) on marketable securities 6,194 (1,978) 4,535 (1,033) Gains on sales of land 118 3,945 - - Severance costs (including non-cash compensation) (2,000) - (2,000) - Costs related to acquisition of remaining 40% interest in FCB (752) - (752) - Other items, net (278) 347 (67) (18) Total (1,475) 2,752 (2,165) (613)Adjusted Funds from Operations (AFFO) (thousands of dollars, except per share amounts) Year ended December 31, 2009 AFFO - EQY and Other Non- AFFO - Core recurring Operations Items Total AFFO FFO excluding dilution loss on Equity One investment and the Company's share of Equity One's non-cash impairment loss $ 144,359 $ 7,637 $ 151,996 Add/(deduct): Interest expense payable in shares 15,342 - 15,342 Rental revenue recorded on a straight-line basis and market rent adjustments (7,376) - (7,376) Non-cash compensation expense 3,609 600 4,209 Revenue sustaining capital expenditures and leasing costs(2) (12,171) - (12,171) Funds from operations from Equity One excluding non-cash impairment loss - (15,009) (15,009) Dividends from Equity One (regular) - 12,452 12,452 Return of capital portion of marketable securities, net (299) - (299) Change in cumulative unrealized (gain) loss on marketable securities - (1,952) (1,952) Loss (gain) on extinguishment of debt - 2,394 2,394 Realized losses on termination of hedge - 1,160 1,160 Unrealized losses on interest rate swaps not designated as hedges - 1,203 1,203 Gain on disposition of land - (118) (118) Adjusted funds from operations ("AFFO") $ 143,464 $ 8,367 $ 151,831 AFFO per diluted share $ 1.40 $ 0.08 $ 1.48 Weighted average diluted shares for AFFO 102,934,634 102,934,634 102,934,634 (thousands of dollars, except per share amounts) Year ended December 31, 2008(1) AFFO - EQY and Other Non- AFFO - Core recurring Operations Items Total AFFO FFO excluding dilution loss on Equity One investment and the Company's share of Equity One's non-cash impairment loss $ 133,322 $ 12,628 $ 145,950 Add/(deduct): Interest expense payable in shares 14,031 - 14,031 Rental revenue recorded on a straight-line basis and market rent adjustments (7,627) - (7,627) Non-cash compensation expense 3,899 - 3,899 Revenue sustaining capital expenditures and leasing costs(2) (11,866) - (11,866) Funds from operations from Equity One excluding non-cash impairment loss - (20,005) (20,005) Dividends from Equity One (regular) - 18,193 18,193 Return of capital portion of marketable securities, net 623 - 623 Change in cumulative unrealized (gain) loss on marketable securities - 1,638 1,638 Loss (gain) on extinguishment of debt - (438) (438) Realized losses on termination of hedge - 290 290 Unrealized losses on interest rate swaps not designated as hedges - - - Gain on disposition of land - (3,945) (3,945) Adjusted funds from operations ("AFFO") $ 132,382 $ 8,361 $ 140,743 AFFO per diluted share $ 1.38 $ 0.09 $ 1.47 Weighted average diluted shares for AFFO 95,586,511 95,586,511 95,586,511 (thousands of dollars, except per share amounts) Three months ended December 31, 2009 AFFO - EQY and Other Non- AFFO - Core recurring Operations Items Total AFFO FFO excluding dilution loss on Equity One investment and the Company's share of Equity One's non-cash impairment loss $ 36,662 $ (503) $ 36,159 Add/(deduct): Interest expense payable in shares 4,819 - 4,819 Rental revenue recorded on a straight-line basis and market rent adjustments (2,731) - (2,731) Non-cash compensation expense 882 600 1,482 Revenue sustaining capital expenditures and leasing costs (3,329) - (3,329) Funds from operations from Equity One excluding non-cash impairment loss - - - Dividends from Equity One (regular) - - - Return of capital portion of marketable securities, net (1,273) - (1,273) Change in cumulative unrealized (gain) loss on marketable securities - (314) (314) Loss (gain) on extinguishment of debt - 1,497 1,497 Realized losses on termination of hedge - 1,181 1,181 Unrealized losses on interest rate swaps not designated as hedges - 1203 1203 Gain on disposition of land - - - Adjusted funds from operations ("AFFO") $ 35,030 $ 3,664 $ 38,694 AFFO per diluted share $ 0.33 $ 0.03 $ 0.36 Weighted average diluted shares for AFFO 108,946,987 108,946,987 108,946,987 (thousands of dollars, except per share amounts) Three months ended December 31. 2008(1) AFFO - EQY and Other Non- AFFO - Core recurring Operations Items Total AFFO FFO excluding dilution loss on Equity One investment and the Company's share of Equity One's non-cash impairment loss $ 35,875 $ 2,099 $ 37,974 Add/(deduct): Interest expense payable in shares 3,540 - 3,540 Rental revenue recorded on a straight-line basis and market rent adjustments (1,461) - (1,461) Non-cash compensation expense 928 - 928 Revenue sustaining capital expenditures and leasing costs (4,779) - (4,779) Funds from operations from Equity One excluding non-cash impairment loss - (4,776) (4,776) Dividends from Equity One (regular) - 5,145 5,145 Return of capital portion of marketable securities, net 409 - 409 Change in cumulative unrealized (gain) loss on marketable securities - 850 850 Loss (gain) on extinguishment of debt - (438) (438) Realized losses on termination of hedge - 290 290 Unrealized losses on interest rate swaps not designated as hedges - - - Gain on disposition of land - (3) (3) Adjusted funds from operations ("AFFO") $ 34,512 $ 3,167 $ 37,679 AFFO per diluted share $ 0.35 $ 0.03 $ 0.38 Weighted average diluted shares for AFFO 99,053,205 99,053,205 99,053,205 (1) Prior year comparative figures have been restated for a change in accounting standards. (2) Estimated at $0.60 per square foot per annum on gross leasable area for 2009 ($0.50 per square foot per annum in 2008)Net Income Three months ended Year ended December 31 December 31 ($ thousands, except per share amounts) 2009 2008(1) 2009 2008(1) Net income $ 14,736 $ 10,574 $ 41,913 $ 37,341 Earnings per share (diluted) $ 0.15 $ 0.12 $ 0.45 $ 0.43 Weighted average common shares - diluted (000's) 97,007 90,424 93,869 87,260 (1) Prior year comparative figures have been restated for a change in accounting standards(per share amounts, except for projected 2009 Guidance 2009 FFO, AFFO and shares outstanding) Provided in Q3 Actual Low High Actual FFO Guidance Projected diluted net income before taxes, per share $0.57 $0.59 $0.54 Projected current taxes (0.02) (0.02) (0.01) Projected future taxes (0.16) (0.16) (0.08) Projected diluted net income per share $0.39 $0.41 $0.45 Adjustments Projected FFO from Equity One 0.16 0.16 0.16 Projected equity income from Equity One (0.09) (0.09) (0.08) Projected amortization and future income taxes 1.18 1.19 1.09 Projected FFO per share(1) $1.64 $1.67 $1.62 Projected FFO(1) $153.9M $157.3M $152.0M Projected weighted average shares outstanding for per share FFO calculations 94.0M 93.9M AFFO Guidance Projected FFO(1) $153.9M $157.3M $152.0M Projected weighted average shares outstanding for per share AFFO calculations (including conversion of convertible debentures) 103.2M 102.9M Projected FFO per share (using weighted average AFFO shares outstanding)(1) $1.49 $1.52 $1.48 Projected dividend income - return of capital portion (0.00) (0.01) (0.00) Projected dividends from Equity One, net of FFO from Equity One (0.02) (0.02) (0.02) Projected revenue sustaining capital expenditures (0.12) (0.12) (0.12) Projected non cash items, net 0.11 0.11 0.14 Projected AFFO per share(1) $1.46 $1.48 $1.48 (1) Excludes the Company's share of Equity One's non cash impairment loss and the dilution loss. See Funds from Operations section.- the decrease in future income taxes which was primarily attributed to a change in the future income tax rate, not anticipated in the guidance; - the effect of Equity One tax matters which resulted in an adjustment in current income taxes arising from the Company's U.S. operations greater than the amount in the guidance; and - non-recurring items as outlined below, which were the result of financing transactions that were not anticipated in the guidance, and the departure of two senior executives. 2009 2009 ($ millions) (Per share) Losses on debt extinguishment (1,497) (0.02) Realized loss on termination of hedges (1,160) (0.01) Unrealized loss on interest rate swaps not designated as hedges (1,203) (0.01) Severance costs (including non-cash compensation) (2,000) (0.02) Total (5,860) (0.06) - same property net operating income growth, taking into account maintaining high occupancy; - development and redevelopment activities; - selective acquisitions; - increasing efficiency and productivity of operations; and - improving the cost of capital, for both debt and equity. 2010 GUIDANCE (per share amounts, except for projected FFO and shares outstanding) Low High FFO Guidance Projected diluted net income per share $0.38 $0.41 Adjustments Projected amortization and future income taxes 1.14 1.16 Projected FFO per share $1.52 $1.57 Projected FFO $150.5M $155.0M Projected weighted average shares outstanding for per share FFO calculations 99.0M AFFO Guidance Projected FFO $150.5M $155.0M Projected weighted average shares outstanding for per share AFFO calculations (including conversion of convertible debentures) 112.4 Projected FFO per share (using weighted average AFFO shares outstanding) $1.34 $1.38 Projected revenue sustaining capital expenditures (0.12) (0.12) Projected non-cash items, net 0.13 0.15 Projected AFFO per share $1.35 $1.41 - Same property NOI growth of 1.0% to 1.5% (excluding redevelopment and expansion); - Development, redevelopment and expansion coming on-line of 450,000 to 550,000 square feet with approximate gross book value of $100 to $120 million; - Income-producing property acquisitions totalling $100 million (includes $31 million invested to-date); - Development property acquisitions totalling $30 million, acquired in the first quarter of 2010; - Refinancing the credit facility to current market rates; - Revenue sustaining capital expenditure is expected to be approximately $0.65 per average square foot; and - Other non-recurring (losses) gains and expenses totalled net loss of $0.5 million consisting of; - gains on marketable securities - $1.2 million - loss on termination of hedges - $1.2 million - loss on debt extinguishment - $0.5 million CONSOLIDATED BALANCE SHEETS December 31 December 31 (thousands of dollars) 2009 2008(1) (restated) ASSETS Real Estate Investments Shopping centres $ 3,288,759 $ 3,040,257 Land and shopping centres under development 224,772 281,959 Deferred leasing costs 17,471 16,146 Intangible assets 22,549 29,312 3,553,551 3,367,674 Investment in Equity One, Inc. - 227,259 Loans, mortgages and other real estate assets 59,220 32,480 3,612,771 3,627,413 Other assets 28,726 27,448 Amounts receivable 45,598 45,501 Cash and cash equivalents 4,548 7,263 $ 3,691,643 $ 3,707,625 LIABILITIES Mortgages, loans and credit facilities $ 1,354,668 $ 1,573,530 Accounts payable and other liabilities 137,658 166,507 Intangible liabilities 13,193 17,264 Senior unsecured debentures 717,040 593,288 Convertible debentures 329,739 218,247 Future income tax liabilities 43,502 43,643 2,595,800 2,612,479 SHAREHOLDERS' EQUITY 1,095,843 1,095,146 $ 3,691,643 $ 3,707,625 (1) Prior year comparative figures have been restated for a change in accounting standards. CONSOLIDATED STATEMENTS OF EARNINGS Three months ended Year ended (thousands of dollars, except per share December 31 December 31 December 31 December 31 amounts) 2009 2008(1) 2009 2008(1) (restated) (restated) REVENUE Property rental revenue $ 113,232 $ 105,695 $ 442,131 $ 410,192 Interest and other income 2,549 347 5,612 1,559 115,781 106,042 447,743 411,751 EXPENSES Property operating costs 39,524 37,784 156,954 149,152 Interest expense 32,343 28,621 125,465 113,685 Amortization Shopping centres 20,594 18,950 83,342 74,406 Deferred leasing costs 946 881 3,662 3,396 Intangible assets 1,482 1,706 7,497 7,783 Deferred financing fees 644 226 2,202 854 Other assets 807 366 2,005 1,305 Corporate expenses 5,801 5,614 22,122 21,577 102,141 94,148 403,249 372,158 Income before the undernoted items 13,640 11,894 44,494 39,593 Equity (loss) income from Equity One, Inc. (1,287) 1,405 7,066 8,716 Other (losses) gains and (expenses) (1,639) 3,916 (1,414) 7,281 Income before income taxes 10,714 17,215 50,146 55,590 Income taxes (recovery): Current (1,662) (380) 533 1,985 Future (2,360) 7,021 7,700 16,264 (4,022) 6,641 8,233 18,249 Net income $ 14,736 $ 10,574 $ 41,913 $ 37,341 Earnings per common share, basic and diluted $ 0.15 $ 0.12 $ 0.45 $ 0.43 (1) Prior year comparative figures have been restated for a change in accounting standards. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Three months ended Year ended December 31 December 31 December 31 December 31 (thousands of dollars) 2009 2008(1) 2009 2008(1) (restated) (restated) NET INCOME $ 14,736 $ 10,574 $ 41,913 $ 37,341 OTHER COMPREHENSIVE (LOSS) INCOME Unrealized foreign currency gains on translating self-sustaining foreign operations Gains (losses) arising during the period - 8,680 (6,156) 12,043 Reclassification adjustment for dilution (gain) loss on investment in Equity One, Inc. - (724) 1,669 (724) Reclassification adjustment for dividend-in-kind - - 17,288 - 7,956 12,801 11,319 Other comprehensive (losses) income of Equity One, Inc. (Losses) gains arising during the period - (3,021) 4,346 (1,933) Reclassification adjustment for dilution (gain) loss included in net income - (11) 29 (11) Reclassification adjustment for dividend-in-kind - - (1,124) - (3,032) 3,251 (1,944) Unrealized gains (losses) on cash flow hedges of interest rates Unrealized gains (losses) arising during the period 1,102 (16,003) 10,182 (16,443) Reclassification adjustments for losses included in net income 2,642 - 2,621 - Reclassification adjustment for dividend-in-kind - - 4,407 - 3,744 (16,003) 17,210 (16,443) Change in cumulative unrealized (losses) gains on available- for-sale marketable securities Unrealized gains (losses) arising during the period 1,524 (4,591) 13,687 (6,645) Reclassification adjustments for (gains) losses included in net income (4,568) - (6,038) 55 (3,044) (4,591) 7,649 (6,590) Other comprehensive income (loss) before income taxes 700 (15,670) 40,911 (13,658) Future income tax expense (recovery) 701 (4,957) 6,202 (5,832) Other comprehensive (loss) income (1) (10,713) 34,709 (7,826) COMPREHENSIVE INCOME (LOSS) $ 14,735 $ (139) $ 76,622 $ 29,515 (1) Prior year comparative figures have been restated for a change in accounting standards. CONSOLIDATED STATEMENTS OF CASH FLOWS Three months ended Year ended December 31 December 31 December 31 December 31 (thousands of dollars) 2009 2008(1) 2009 2008(1) (restated) (restated) CASH FLOW PROVIDED BY (USED IN): OPERATING ACTIVITIES Net income $ 14,736 $ 10,574 $ 41,913 $ 37,341 Items not affecting cash Amortization 24,473 22,129 98,708 87,744 Amortization of above- and below-market leases (578) (574) (2,323) (2,253) Rent revenue recognized on a straight-line basis (2,153) (887) (5,053) (5,374) Gain on disposition of income-producing property (526) (1,631) (737) (1,631) Gains on disposition of land - (3) (118) (3,945) Realized (gains) losses on sale of marketable securities (3,340) 160 (4,242) 212 Change in cumulative unrealized (gains) losses on marketable securities held-for-trading (314) 850 (1,952) 1,638 Loss (gain) on settlement of debt 1,497 (438) 2,394 (438) Non-cash compensation expense 1,482 928 4,209 3,899 Less settlement of restricted shares units (2,463) (1,275) (2,463) (1,275) Less settlement of deferred shares units (514) - (514) - Interest paid in excess of effective interest on assumed mortgages (294) (294) (1,189) (1,436) Effective interest rate in excess of coupon rate on senior unsecured and convertible debentures 306 225 984 864 Convertible debenture interest paid in common shares - - 12,613 12,891 Other non-cash interest expense 749 617 2,769 2,466 Equity income from Equity One, Inc. 1,287 (1,405) (7,066) (8,716) Dilution (gain) loss on Equity One, Inc. investment - (2,898) 676 (2,898) Future income taxes (2,360) 7,021 7,700 16,264 Loss on foreign exchange currency 67 - 278 - Unrealized loss on interest rate swaps not designated as hedges 1,203 - 1,203 - Deferred leasing costs (1,517) (1,021) (5,022) (4,033) Dividends received from Equity One, Inc. - 5,145 12,452 18,193 Net change in non-cash operating items 18,695 20,911 (6,592) (1,994) Cash provided by operating activities 50,436 58,134 148,628 147,519 INVESTING ACTIVITIES Acquisition of shopping centres (35,633) (10,757) (59,039) (56,704) Acquisition of land and shopping centres held for development (886) (284) (10,273) (11,887) Proceeds from disposition of shopping centre 4,756 - 4,756 - Proceeds from disposition of land held for development - 433 70 10,581 Expenditures on shopping centres (12,886) (11,935) (35,309) (26,619) Expenditures on land and shopping centres under development (33,733) (77,179) (168,110) (227,775) Changes in accounts payable and accrued liabilities related to investing activities (11,671) 19,372 (15,595) 32,908 Investment in common shares of Equity One, Inc. - (1,263) - (1,263) Increase in loans and mortgages receivable (2,324) (227) (3,714) (1,507) Investment in marketable securities (3,631) (14,869) (6,743) (37,110) Return of capital from investments in marketable securities 264 304 2,030 623 Proceeds from disposition of marketable securities 31,305 5,292 59,067 7,474 Cash used in investing activities (64,439) (91,113) (232,860) (311,279) FINANCING ACTIVITIES Mortgage financings, loans and credit facilities Borrowings, net of financing costs 72,250 207,363 621,208 552,708 Principal instalment payments (8,422) (9,835) (38,917) (38,139) Other repayments on maturity (210,000) (134,248) (685,930) (452,273) Purchase of senior unsecured debentures - (2,543) (1,145) (2,543) Issuance of senior unsecured debentures, net of issue costs 124,000 - 124,000 - Issuance of convertible debentures, net of issue costs 47,996 - 120,071 - Issuance of common shares, net of issue costs 2,791 1,306 57,771 149,797 Issuance of warrants, net of issue costs - - 1,821 - Cash balance included in dividend-in-kind (65) - (492) - Payment of dividends (29,399) (28,682) (118,192) (49,312) Cash provided by financing activities (849) 33,361 80,195 160,238 Effect of currency rate movement on cash balances - 379 1,322 334 Increase in cash and cash equivalents (14,852) 761 (2,715) (3,188) Cash and cash equivalents, beginning of the period 19,400 6,502 7,263 10,451 Cash and cash equivalents, end of the period $ 4,548 $ 7,263 $ 4,548 $ 7,263 SUPPLEMENTARY INFORMATION Cash income taxes paid $ - $ 611 $ 1,358 $ 2,251 Cash interest paid $ 30,065 $ 30,774 $ 126,695 $ 120,183 (1) Prior year comparative figures have been restated for a change in accounting standards. CONSOLIDATED STATEMENTS OF FUNDS FROM OPERATIONS (thousands of dollars, except per share amounts Three months ended Year ended December 31 December 31 December 31 December 31 2009 2008(1) 2009 2008(1) (restated) (restated) Net income for the period $ 14,736 $ 10,574 $ 41,913 $ 37,341 Add (deduct): Amortization of shopping centres, deferred costs and intangible assets 23,022 21,537 94,501 85,585 Gain on disposition of income-producing shopping centre (526) (1,631) (737) (1,631) Equity income (loss) from Equity One(2) 1,287 (1,405) (7,066) (8,716) Funds from operations from Equity One(2) - 3,753 15,009 12,502 Future income taxes (recovery) (2,360) 7,021 7,700 16,264 Funds from operations ("FFO") 36,159 39,849 151,320 141,345 Deduct: the Company's share of Equity One's non-cash impairment loss - 1,023 - 7,503 Deduct: dilution (gain) loss on Equity One investment - (2,898) 676 (2,898) FFO excluding dilution (gain) loss on Equity One investment and the Company's share of Equity One's non-cash impairment loss $ 36,159 $ 37,974 $ 151,996 $ 145,950 FFO per diluted share $ 0.37 $ 0.44 $ 1.61 $ 1.62 Deduct: the Company's share of Equity One's non-cash impairment loss - 0.01 - 0.09 Deduct: dilution (gain) loss on Equity One investment - (0.03) 0.01 (0.04) FFO per diluted share excluding dilution loss on Equity One investment and the Company's share of Equity One's non-cash impairment loss $ 0.37 $ 0.42 $ 1.62 $ 1.67 Weighted average diluted shares - FFO 97,007,411 90,423,576 93,868,815 87,260,224 (1) Prior year comparative figures have been restated for a change in accounting standards. (2) Current year amounts cover period to August 14, 2009.