BTB Reports Q2 2024 Financial Results: Rental Revenue Growth and Sustained Leasing Activity

MONTRÉAL, Aug. 5, 2024 /CNW/ – BTB Real Estate Investment Trust (TSX: BTB.UN) (“BTB“, the “REIT” or the “Trust“) announced today its financial results for the second quarter of 2024 ended June 30, 2024 (the “Second Quarter“).

“This quarter has been marked by a strong performance across our portfolio, reflecting the effectiveness of our strategic initiatives and the dedication of our team.” says Michel Léonard, President and CEO of BTB. “I am delighted to report that our occupancy rate reached a new record high of 94.6%, highlighting the success of our leasing efforts and our commitment to highquality properties and our investments in industrial properties. In addition, for the cumulative sixmonth period, rental revenue and same-property NOI increased by 0.5% and 1.5%, respectively, compared to the same period last year. These results are a testament to the organic growth of our portfolio and our property management. Our FFO adjusted and AFFO adjusted also saw positive growth compared to the previous quarter, reflecting the strong performance of our assets. Our debt ratio is improving, with a total ratio of 58.1% and a mortgage debt ratio of 51.4%, both down from December 31, 2023. In fact, we are spreading out our mortgage refinancing maturities to try to counteract the fluctuations in interest rates on mortgages of recent months, and with the latest announcements from the Bank of Canada, the outlook appears to bode well for future refinancings of our portfolio. This strategy demonstrates our proactive and prudent approach to debt management in the current environment. We remain committed to our strategic priorities, including targeted dispositions and acquisitions, prudent capital management and ongoing property improvements. We are confident that our discipline will continue to deliver strong results and drive long-term value creation for all of our stakeholders.”

SUMMARY OF SIGNIFICANT ITEMS AS AT JUNE 30th, 2024

Total number of properties: 75
Total leasable area: 6.1 million square feet
Total asset value: $1,236 million
Market capitalization: $274 million (unit trading price of $3.13 as at June 30, 2024)

OPERATIONAL HIGHLIGHTS

Periods ended June 30	Quarter		Cumulative (6 months)
	2024	2023	2024	2023
Occupancy – committed (%)	94.6 %	94.1 %	–	–
Signed new leases (in sq.ft.)	40,080	125,223	98,142	192,423
Renewed leases at term (in sq.ft.)	158,445	164,189	250,236	207,735
Renewal rate (%)	88.7 %	70.2 %	79.6 %	60.0 %
Renewed leases prior to the end of the term (in sq.ft.)	58,160	44,149	61,907	60,760
Average lease renewal rate	5.7 %	4.9 %	6.6 %	6.2 %

During the quarter, the Trust completed a total of 216,605 square feet of lease renewals and 40,080 square feet of new leases. The occupancy rate increased to 94.6%, representing a 10 basis points increase compared to the prior quarter and a 50 basis points increase compared to the same period in 2023. The increase in the average rent renewal rate for the current quarter and current cumulative six-month period was respectively 5.7% and 6.6%. Shortly after the end of the quarter, Nuera Air, a tenant occupying 132,665 square feet in an industrial property located in Laval, Québec, declared bankruptcy. The Trust has already retained the services of a national commercial brokerage firm to lease the property.

FINANCIAL RESULTS HIGHLIGHTS

Periods ended June 30	Quarter		Cumulative (6 months)
(in thousands of dollars, except for ratios and per unit data)	2024	2023	2024	2023
	$	$	$	$
Rental revenue	32,218	31,708	64,854	64,619
Net operating income (NOI)	18,856	19,041	37,216	38,049
Net income and comprehensive income	7,272	10,846	14,425	19,648
Adjusted EBITDA ⁽¹⁾¹	17,539	17,956	34,576	35,110
Same-property NOI ⁽¹⁾	18,692	18,415	34,897	34,021
FFO Adjusted ⁽¹⁾	9,149	10,195	18,075	20,228
FFO Adjusted payout ratio	72.2 %	63.8 %	72.8 %	63.8 %
AFFO Adjusted ⁽¹⁾	8,230	9,433	16,050	18,315
AFFO Adjusted payout ratio	80.2 %	69.0 %	82.0 %	70.5 %
FINANCIAL RESULTS PER UNIT
Net income and comprehensive income	8.3¢	12.5¢	16.4¢	22.8¢
Distributions	7.5¢	7.5¢	15.0¢	15.0¢
FFO Adjusted ⁽¹⁾	10.4¢	11.8¢	20.6¢	23.5¢
AFFO Adjusted ⁽¹⁾	9.4¢	10.9¢	18.3¢	21.3¢

Rental revenue: Stood at $32.2 million for the current quarter, which represents an increase of 1.6% compared to the same quarter of 2023. For the cumulative six-month period, rental revenue totalled $64.9 million which represents an increase of 0.5% compared to the same period in 2023. During Q1 2023, the Trust recorded a one-time $1.4 million increase of rental revenue pursuant to unrecorded revenue for previous quarters associated to a specific lease (the “One-Time Adjustment“). Excluding the One-Time Adjustment, rental revenue for current cumulative six-month period vs the same period in 2023 would have increased by 2.7%.
Net Operating Income (NOI): Totalled $18.9 million for the current quarter, which represents a decrease of 0.5% compared to the same quarter of 2023. The decrease for the quarter is partially related to the bankruptcy of a tenant in Quebec City, Énergie Cardio (causing a negative impact of $0.2 million); which space was rapidly leased to the group that purchased the assets of the business of the bankrupt tenant, taking possession of the space in September 2024. For the cumulative six-month period, the NOI totalled $37.2 million which represents a decrease of 2.1% compared to the same period in 2023. Excluding the One-Time Adjustment, the cumulative six-month period NOI for Q2 2024 vs the same period in 2023 would have increased by 1.6%.
Net income and comprehensive income: Totalled $7.3 million for the quarter compared to $10.8 million for the same period in 2023, representing a decrease of $3.5 million. The decrease for the quarter is primarily due to an increase in net financial expenses of $2.6 million, an increase in administrative expenses of $0.8 million and a decrease in NOI of $0.2 million. For the 2024 cumulative six-month period, net income and comprehensive income totalled $14.4 million compared to $19.7 million, representing a decrease of $5.3 million. Excluding the One-Time Adjustment, the decrease for the cumulative six-month period from Q2 2024 vs Q2 2023 would have been $3.8 million.
Same-property NOI ⁽¹⁾: For the quarter, the same-property NOI increased by 1.5% compared to the same period in 2023, and for the cumulative six-month period, the same-property NOI increased by 2.6% compared to the same period in 2023. The increases are due to an increase of rental rates for lease renewals of 5.7% for the cumulative six-month period in the industrial segment as well as an increase in rental spreads for in-place leases, an increase of rental rates for lease renewals of 7.7% for the cumulative six-month period in the suburban office segment and an increase of rental rates for lease renewals of 6.0% for the cumulative six-month period in the necessity-based retail segment.
FFO adjusted per unit ⁽¹⁾: Was 10.4¢ per unit for the quarter compared to 11.8¢ per unit for the same period in 2023, representing a decrease of 1.4¢ per unit. The decrease of FFO adjusted for the quarter is explained by an increase in interest expense net of financial income of $0.3 million, an NOI decrease of $0.2 million and an increase in administration expenses of $0.5 million. For the cumulative six-month period, the FFO adjusted was 20.6¢ per unit compared to 23.5¢ per unit for the same period in 2023, representing a decrease of 2.9¢ per unit. Excluding the One-Time adjustment, the cumulative six-month period FFO adjusted per unit vs the same period in 2023 would have recorded a decrease of 1.2¢ per unit. In addition, FFO adjusted per unit was negatively impacted by an increase in the weighted average number of units outstanding of 1.5 million units, due to the unitholder’s participation in the distribution reinvestment plan.
FFO adjusted payout ratio ⁽¹⁾: Was 72.2% for the quarter compared to 63.8% for the same period in 2023, an increase of 8.4%. For the cumulative six-month period, the FFO adjusted payout ratio was 72.8% compared to 63.8% for the same period in 2023, an increase of 9%. Excluding the One-Time Adjustment, the cumulative six-month period FFO adjusted payout ratio vs the same period in 2023 would have increased by 4.9%.
AFFO adjusted per unit ⁽¹⁾: Was 9.4¢ per unit for the quarter compared to 10.9¢ per unit for the same period in 2023, representing a decrease of 1.5¢ per unit, in line with the decrease of the FFO adjusted explained above. For the cumulative six-month period, the AFFO adjusted per unit was 18.3¢ per unit compared to 21.3¢ per unit for the same period in 2023, representing a decrease of 3.0¢ per unit compared to the same period in 2023. Excluding the One-Time Adjustment, the cumulative six-month period AFFO adjusted per unit would have decreased by 1.3¢ per unit. AFFO adjusted per unit was also negatively impacted by the increase in weighted average number of units outstanding of 1.5 million units, due to the unitholder’s participation in the distribution reinvestment plan.
AFFO adjusted payout ratio ⁽¹⁾: Was 80.2% for the quarter compared to 69.0% for the same period in 2023. For the cumulative six-month period, the AFFO adjusted payout ratio was 82.0% compared to 70.5% for the same period in 2023, representing an increase of 11.5%. Excluding the One-Time adjustment, the cumulative six-month period AFFO adjusted payout ratio vs the same period in 2023 would have increased by 5.5%.

BALANCE SHEET AND LIQUIDITY HIGHLIGHTS

Periods ended June 30	Cumulative (6 months)
(in thousands of dollars, except for ratios and per unit data)	2024	2023
	$	$
Total assets	1,235,935	1,229,249
Total debt ratio ⁽¹⁾	58.1 %	58.9 %
Mortgage debt ratio ⁽²⁾	51.4 %	52.9 %
Weighted average interest rate on mortgage debt	4.57 %	4.28 %
Market capitalization	273,813	277,059
NAV per unit ⁽¹⁾	5.46	5.39

Debt metrics: BTB ended the quarter with a total debt ratio ⁽¹⁾ of 58.1%, recording a decrease of 50 basis points compared to December 31, 2023. The Trust ended the quarter with a mortgage debt ratio ⁽¹⁾ of 51.4%, a decrease of 80 basis points compared to December 31, 2023.
Liquidity position: The Trust held $0.9 million of cash at the end of the quarter and $17.9 million is available under its credit facilities. The Trust has the option to increase its capacity under credit facilities by $10.0 million, subject to lender approval. ⁽¹⁾⁽³⁾

^{__________________________}

⁽¹⁾ Non-IFRS financial measure. See Appendix 1. The referred non-IFRS financial measures do not have a standardized meaning prescribed by IFRS and these measures cannot be compared to similar measures used by other issuers.

⁽²⁾ This is a non-IFRS financial measure. The mortgage debt ratio is calculated by dividing the mortgage loans outstanding by the total gross value of the assets of the Trust less cash and cash equivalents.

⁽³⁾ 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.

QUARTERLY CALL INFORMATION

Management will hold a conference call on Tuesday, August 6^th, 2024, at 9 am, Eastern Time, to present BTB’s financial results and performance for the second quarter of 2024.

DATE:	Tuesday, August 6^th, 2024
TIME:	9 am, Eastern Time
URL ENTRY:	https://emportal.ink/3VZ7t5M
DIAL:	Local: 1-416-764-8688
DIAL:	North America (toll-free): 1-888-390-0546
WEB:	https://app.webinar.net/LbY2Amxr0MB
VISUAL:	A presentation will be uploaded on BTB’s website prior to the call

The media and all interested parties may attend the call-in listening mode only. Conference call operators will coordinate the question-and-answer period (from analysts only) and will instruct participants regarding the procedures during the call.

The audio recording of the conference call will be available via playback until August 13^th, 2024, by dialing: 1 416 764-8677 (local) or, 1 888 390-0541 (toll-free) and by entering the following access code: 052162 #

ABOUT BTB

BTB is a real estate investment trust listed on the Toronto Stock Exchange. BTB REIT invests in industrial, suburban office and necessity-based retail properties across Canada for the benefit of their investors. As of today, BTB owns and manages 75 properties, representing a total leasable area of approximately 6.1 million square feet.

People and their stories are at the heart of our success.

For more detailed information, visit BTB’s website at www.btbreit.com.

FORWARD-LOOKING STATEMENTS

This press release may contain forward-looking statements with respect to BTB. These statements generally can be identified by the use of forward-looking words such as “may”, “will”, “expect”, “estimate”, “anticipate”, “intend”, “believe” or “continue” or the negative thereof or similar variations. The actual results and performance of BTB could differ materially from those expressed or implied by such statements. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Some important factors that could cause actual results to differ materially from expectations include, among other things, general economic and market factors, competition, changes in government regulation, and the factors described from time to time in the documents filed by BTB with the securities regulators in Canada. The cautionary statements qualify all forward-looking statements attributable to BTB and persons acting on their behalf. Unless otherwise stated or required by applicable law, all forward-looking statements speak only as of the date of this press release.

APPENDIX 1: RECONCILIATION OF NON-IFRS MEASURES

Non-IFRS Financial Measures

Certain terms used in this press release are listed and defined in the table hereafter, including any per unit information if applicable, are not measures recognized by International Financial Reporting Standards (“IFRS”) and do not have standardized meanings prescribed by IFRS. Such measures may differ from similar computations as reported by similar entities and, accordingly, may not be comparable to similar measures. Explanations on how these non-IFRS financial measures provide useful information to investors and additional purposes, if any, for which the Trust uses these non- IFRS financial measures, are also included in the table hereafter.

Securities regulations require that non-IFRS financial measures be clearly defined and that they not be assigned greater weight than IFRS measures. The referred non-IFRS financial measures, which are reconciled to the most similar IFRS measure in the table thereafter if applicable, do not have a standardized meaning prescribed by IFRS and these measures cannot be compared to similar measures used by other issuers.

NON-IFRS MEASURE	DEFINITION
Adjusted net income	Adjusted net income is a non-IFRS financial measure that starts with net income and comprehensive income and removes the effects of: (i) fair value adjustment of investment properties; (ii) fair value adjustment of derivative financial instruments; (iii) fair value adjustment of Class B LP units; and (iv) transaction costs incurred for acquisitions and dispositions of investment properties and early repayment fees. The Trust considers this to be a useful measure of operating performance, as fair value adjustments can fluctuate widely with the real estate market.
Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”)	Adjusted EBITDA income is a non-IFRS financial measure that starts with net income and comprehensive income and removes the effects of certain adjustments, on a proportionate basis, including: (i) interest expense; (ii) taxes; (iii) depreciation of property and equipment; (iv) amortization of intangible assets; (v) fair value adjustments (including adjustments of investment properties, of financial instruments, of Class B LP units and of unit price adjustments related to unit-based compensation); (vi) transaction costs for acquisitions and dispositions of investment properties and early repayment fees; and (vii) straight-line rental revenue adjustments. The most directly comparable IFRS measure to Adjusted EBITDA is net income and comprehensive income. The Trust believes Adjusted EBITDA is a useful metric to determine its ability to service debt, to finance capital expenditures and to provide distributions to its Unitholders.
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. The Trust believes this is a useful measure as NOI growth can be assessed on its portfolio by excluding the impact of property acquisitions and dispositions of both the current year and previous year. The Trust uses the Same-Property NOI to indicate the profitability of its existing portfolio operations and the Trust’s ability to increase its revenues, reduce its operating costs and generate organic growth.
Funds from Operations (“FFO”) and FFO Adjusted	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. FFO Adjusted is also a non-IFRS financial measure that starts with FFO and removes the impact of transaction costs on acquisitions and dispositions of investment properties and early repayment fees. The Trust believes FFO and FFO Adjusted are key measures of operating performance and allow the investors to compare its historical performance.
Adjusted Funds from Operations (“AFFO”) and AFFO Adjusted	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 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. AFFO Adjusted is also a non-IFRS financial measure that starts with AFFO and removes the impact of transaction costs on acquisitions and dispositions of investment properties and early repayment fees. The Trust considers AFFO and AFFO Adjusted to be useful measures of economic earnings and relevant in understanding its ability to service its debt, fund capital expenditures and provide distributions to unitholders.
FFO and AFFO payout ratios and FFO Adjusted and AFFO Adjusted payout ratios	FFO and AFFO payout ratios and FFO Adjusted and AFFO Adjusted payout ratios are non-IFRS financial measures used by most Canadian real estate investment trusts based on a standardized definition established by REALPAC in its White Paper. These payout ratios are calculated by dividing the actual distributions per unit by FFO, AFFO and FFO Adjusted and AFFO Adjusted per unit in each period. The Trust considers these metrics a useful way to evaluate its distribution paying capacity.
Total debt ratio	Total debt ratio is a non-IFRS financial measure of the Trust financial leverage, which is calculated by taking the total long-term debt less cash divided by 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.
Interest Coverage Ratio	Interest coverage ratio is a non-IFRS financial measure which is calculated by taking the Adjusted EBITDA divided by interest expenses net of financial income (interest expenses exclude early repayment fees, accretion of effective interest, distribution on Class B LP units, accretion of non-derivative liability component of convertible debentures and the fair value adjustment on derivative financial instruments and Class B LP units). The Trust considers this metric useful as it indicates its ability to meet its interest cost obligations for a given period.
Debt Service Coverage Ratio	Debt service coverage ratio is a non-IFRS financial measure which is calculated by taking the Adjusted EBITDA divided by the Debt Service Requirements, which consists of principal repayments and interest expenses net of financial income (interest expenses exclude early repayment fees, accretion of effective interest, distribution on Class B LP units, accretion of non-derivative liability component of convertible debentures and the fair value adjustment on derivative financial instruments and Class B LP units). The Trust considers this metric useful as it indicates its ability to meet its interest cost obligations for a given period.
Provision For Non- Recoverable Capital Expenditures	In calculating adjusted 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.

NON-IFRS FINANCIAL MEASURES – QUARTERLY RECONCILIATION

Funds from Operations (FFO) ⁽¹⁾

The following table provides a reconciliation of net income and comprehensive income established in accordance with IFRS and FFO ⁽¹⁾ for the last eight quarters:

	2024	2024	2023	2023	2023	2023	2022	2022
	Q-2	Q-1	Q-4	Q-3	Q-2	Q-1	Q-4	Q-3
(in thousands of dollars, except for per unit)	$	$	$	$	$	$	$	$
Net income and comprehensive income (IFRS)	7,272	7,153	1,734	15,216	10,846	8,802	1,769	11,693
Fair value adjustment on investment properties	–	(6)	4,480	(6,481)	–	–	7,781	1,230
Fair value adjustment on Class B LP units	(21)	160	(42)	(159)	(775)	–	160	(142)
Amortization of lease incentives	704	690	641	664	750	728	787	773
Fair value adjustment on derivative financial instruments	379	(325)	2,396	(584)	(763)	184	(1,971)	(3,898)
Leasing payroll expenses ⁽⁶⁾	433	591	401	359	327	356	682	182
Distributions – Class B LP units	53	52	52	56	42	22	26	26
Unit-based compensation (Unit price remeasurement) ⁽⁵⁾	63	409	(11)	(87)	(232)	(59)	198	(172)
FFO ⁽¹⁾	8,883	8,724	9,651	8,984	10,195	10,033	9,432	9,692
Transaction costs on disposition of investment properties and mortgage early repayment fees	266	201	37	46	–	–	627	93
FFO Adjusted ⁽¹⁾	9,149	8,925	9,688	9,030	10,195	10,033	10,059	9,785
FFO per unit ⁽¹⁾ ⁽²⁾ ⁽³⁾	10.1¢	10.0¢	11.1¢	10.3¢	11.8¢	11.7¢	11.0¢	11.4¢
FFO Adjusted per unit ⁽¹⁾ ⁽²⁾ ⁽⁴⁾	10.4¢	10.2¢	11.1¢	10.4¢	11.8¢	11.7¢	11.8¢	11.5¢
FFO payout ratio ⁽¹⁾	74.3 %	75.2 %	67.5 %	72.9 %	63.8 %	64.1 %	67.9 %	65.9 %
FFO Adjusted payout ratio ⁽¹⁾	72.2 %	73.5 %	67.2 %	72.5 %	63.8 %	64.1 %	63.6 %	65.2 %

⁽¹⁾ This is a non-IFRS financial measure. The referred non-IFRS financial measures do not have a standardized meaning prescribed by IFRS and these measures cannot be compared to similar measures used by other issuers.

⁽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 FFO Adjusted per unit ratio is calculated by dividing the FFO Adjusted ⁽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 FFO Adjusted and AFFO Adjusted 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.

Adjusted Funds from Operations (AFFO) ⁽¹⁾

The following table provides a reconciliation of FFO ⁽¹⁾ and AFFO ⁽¹⁾ for the last eight quarters:

	2024	2024	2023	2023	2023	2023	2022	2022
	Q-2	Q-1	Q-4	Q-3	Q-2	Q-1	Q-4	Q-3
(in thousands of dollars, except for per unit)	$	$	$	$	$	$	$	$
FFO (1)	8,883	8,724	9,651	8,984	10,195	10,033	9,432	9,692
Straight-line rental revenue adjustment	(183)	(394)	(197)	(842)	(291)	(633)	(1,077)	(521)
Accretion of effective interest	361	308	310	271	278	236	336	219
Amortization of other property and equipment	17	17	20	33	23	23	31	35
Unit-based compensation expenses	(95)	(9)	159	184	237	256	206	130
Provision for non-recoverable capital expenditures ⁽¹⁾	(644)	(653)	(639)	(626)	(634)	(658)	(630)	(599)
Provision for unrecovered rental fees ⁽¹⁾	(375)	(375)	(375)	(375)	(375)	(375)	(375)	(375)
AFFO ⁽¹⁾	7,964	7,618	8,929	7,629	9,433	8,882	7,923	8,581
Transaction costs on disposition of investment properties and mortgage early repayment fees	266	201	37	46	–	–	627	93
AFFO Adjusted ⁽¹⁾	8,230	7,819	8,966	7,675	9,433	8,882	8,550	8,674
AFFO per unit ⁽¹⁾ ⁽²⁾ ⁽³⁾	9.1¢	8.7¢	10.2¢	8.8¢	10.9¢	10.3¢	9.3¢	10.1¢
AFFO Adjusted per unit ⁽¹⁾ ⁽²⁾ ⁽⁴⁾	9.4¢	8.9¢	10.3¢	8.8¢	10.9¢	10.3¢	10.0¢	10.2¢
AFFO payout ratio ⁽¹⁾	82.9 %	86.2 %	72.9 %	85.8 %	69.0 %	72.4 %	80.8 %	74.4 %
AFFO Adjusted payout ratio ⁽¹⁾	80.2 %	83.9 %	72.6 %	85.3 %	69.0 %	72.4 %	74.9 %	73.6 %

⁽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 AFFO Adjusted per unit ratio is calculated by dividing the AFFO Adjusted ⁽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).

Debt Ratios

The following table summarizes the Trust’s debt ratios as at June 30, 2024, and 2023 and December 31 2023:

(in thousands of dollars)	June 30, 2024	December 31, 2023	June 30, 2023
	$	$	$
Cash and cash equivalents	(857)	(912)	(3,744)
Mortgage loans outstanding ⁽¹⁾	636,492	640,425	648,348
Convertible debentures ⁽¹⁾	43,375	43,185	43,001
Credit facilities	39,606	36,359	34,301
Total long-term debt less cash and cash equivalents ⁽²⁾ ⁽³⁾	718,616	719,057	721,906
Total gross value of the assets of the Trust less cash and cash equivalents ⁽²⁾ ⁽⁴⁾	1,236,326	1,227,949	1,226,664
Mortgage debt ratio (excluding convertible debentures and credit facilities) ⁽²⁾ ⁽⁵⁾	51.4 %	52.2 %	52.9 %
Debt ratio – convertible debentures ⁽²⁾ ⁽⁶⁾	3.5 %	3.5 %	3.5 %
Debt ratio – credit facilities ⁽²⁾ ⁽⁷⁾	3.2 %	3.0 %	2.8 %
Total debt ratio ⁽²⁾	58.1 %	58.6 %	58.9 %

⁽¹⁾ Before unamortized financing expenses and fair value assumption adjustments.

⁽²⁾ This is a non-IFRS financial measure. The referred non-IFRS financial measures do not have a standardized meaning prescribed by IFRS and these measures cannot be compared to similar measures used by other issuers.

⁽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.