\n| (4) <\/td>\n | FFO per unit on a diluted basis was $0.091 and $0.322 for the second quarter and year-to-date results, respectively, before the reversal of the finance charge related to the Transferor Notes transactions.<\/td>\n<\/tr>\n<\/table>\n Financial Highlights for the Quarter: <\/b><\/p>\n\n- Net Operating Income<\/b>(1)<\/sup> \u2013 <\/b>Second quarter NOI(1)<\/sup> of $118.7 million<\/span> was $6.7 million<\/span> higher than Forecast. The positive variance was driven primarily by the acquisition of investment properties following the Trust\u2019s IPO, which contributed $5.2 million<\/span> to NOI(1)<\/sup>. Based on the initial portfolio of 425 properties, same property NOI(1) <\/sup>of $113.5 million<\/span> was $1.5 million<\/span> better than Forecast. This improvement was primarily attributable to $0.9 million<\/span> in lease surrender revenue and improved cost recoveries.<\/li>\n
- Net Income \/ Loss \u2013 <\/b>Second quarter net loss was $1.5 million<\/span>. The loss was driven by a $52.3 million<\/span> non-cash finance charge related to the replacement of Transferor Notes with senior unsecured debentures that have substantially similar terms and that were subsequently sold by Loblaw to unrelated parties. After adjusting net income to reverse this non-cash finance charge and the $11.3 million<\/span> gain from fair value adjustments, net income was $39.4 million<\/span>, $5.5 million<\/span> greater than Forecast of $33.9 million<\/span>. This increase was primarily attributable to NOI(1)<\/sup> from acquisitions not included in the Forecast, and general and administrative expenses of $1.0 million<\/span> less than Forecast, which were partially offset by higher net interest expense and other financing charges of $2.9 million<\/span>.<\/li>\n
- Funds from Operations<\/b>(1)<\/sup> \u2013 <\/b>Second <\/b>quarter FFO(1)<\/sup> was $34.4 million<\/span> or $0.091<\/span> per unit, compared with Forecast <\/b><\/sup>of $78.1 million<\/span> or $0.221<\/span> per unit. FFO(1)<\/sup> was impacted by the $52.3 million<\/span> non-cash finance charge. Excluding this charge, the Trust\u2019s second quarter FFO(1)<\/sup> was $86.7 million<\/span> or $0.228<\/span> per unit. This improvement was driven by post-IPO acquisitions and by general and administrative expenses being lower than Forecast.<\/li>\n
- Adjusted Funds from Operations<\/b>(1) <\/b><\/sup>\u2013 <\/b>Second quarter AFFO(1)<\/sup> was $69.8 million<\/span> or $0.184<\/span> per unit, compared with Forecast of $63.3 million<\/span> or $0.179<\/span> per unit. The improvement in AFFO(1)<\/sup> was driven by NOI(1)<\/sup> from post-IPO acquisitions and lower than Forecast general and administrative expenses.<\/li>\n
- Distributions<\/b> declared during the quarter totaled $0.162501<\/span> per unit for an AFFO(1)<\/sup> payout ratio of 88.3%.<\/li>\n<\/ul>\n
Operational Highlights: <\/b><\/p>\n\n- Leasing Profile \u2013 <\/b>During the second quarter of 2014, Choice Properties entered into binding leases or offers to lease totaling 166,809 square feet, of which 78,078 square feet represented the renewal of expiring leases.<\/li>\n
- Occupancy \u2013 <\/b>At June 30, 2014<\/span> the Trust\u2019s portfolio occupancy rate was 97.7%, unchanged from December 31, 2013<\/span>.<\/li>\n
- Accretive Acquisitions \u2013 <\/b>During the second quarter of 2014, Choice Properties acquired a 20-property portfolio from Loblaw for an aggregate purchase price of approximately $198.5 million<\/span>, excluding transaction costs. The acquisition was immediately accretive, with an overall year-one capitalization rate of 6.50%. The 20 properties are located across Canada<\/span>, added more than 1.2 million square feet of gross leasable area and are expected to provide an estimated annual stabilized NOI of approximately $13 million<\/span>.<\/li>\n
- Development Program<\/b> \u2013<\/b> The Trust continued to progress on development projects, with construction completed to deliver new GLA for two new retail tenants at its Toronto, Ontario<\/span> property, and remained on track for the construction of a new Fortinos bannered Loblaw store in Stoney Creek, Ontario<\/span>. Both of these projects are expected to open to consumers in the second half of 2014. Construction of a Real Canadian Superstore in Surrey, British Columbia<\/span> continued to proceed on plan to deliver new GLA in 2015.<\/li>\n
- Active Management \u2013<\/b> During the quarter, implementation of Choice Properties\u2019 ERP system progressed to the functional testing phase in preparation for the internalization of the Trust\u2019s property management platform.<\/li>\n<\/ul>\n
Capital Structure: <\/b><\/p>\n\n- Capacity to invest for further growth \u2013 <\/b>At June 30, 2014<\/span>, the Trust\u2019s debt service coverage ratio(2)<\/sup> was 3.4 times. With stable cash flow from operations and access to a $500 million<\/span> unsecured revolving credit facility, the Trust has the capacity to meet ongoing obligations and invest for further growth.<\/li>\n<\/ul>\n
Outlook <\/b>
Choice Properties is focused on building its business platform and is dedicated to enhancing and growing its asset base to consistently create and deliver value to Unitholders. Although the economic environment, particularly with respect to interest rates, creates some uncertainty, Choice Properties expects that its solid balance sheet, and secure and reliable cash flows from long-term leases will enable it to meet its ongoing obligations and support further growth. Choice Properties believes that the current Canadian retail and commercial real estate markets are relatively stable, and present development, acquisition and improved tenancy potential for future growth. As a result, the Trust expects to execute on its opportunities to develop and redevelop existing at-grade excess density, acquire assets from a dedicated pipeline from Loblaw\u2019s remaining portfolio and strengthen its underlying operations through improved leasing strategies and active property management. Over the longer-term, Choice Properties will seek to further expand through its development program with Loblaw and third parties and purchase third-party assets that meet its investment criteria.<\/p>\n\n\n| (1) <\/td>\n | See \u00ab\u00a0Non-GAAP Financial Measures\u00a0\u00bb beginning on page 4.<\/td>\n<\/tr>\n | \n| (2) <\/td>\n | Debt ratios include Class C LP Units but exclude Exchangeable Units. The ratios are non-GAAP financial measures calculated based on the Trust Indenture, as supplemented.<\/td>\n<\/tr>\n<\/table>\n Forward-Looking Statements <\/b>
This press release contains forward-looking statements about Choice Properties\u2019 objectives, plans, goals, aspirations, strategies, financial condition, results of operations, cash flows, performance, prospects and opportunities. Specific statements with respect to anticipated future results can be found in various sections included but not limited to Section 3 \u00ab\u00a0Objectives and Strategies\u00a0\u00bb, Section 5 \u00ab\u00a0Investment Properties\u00a0\u00bb, Section 7 \u00ab\u00a0Results of Operations\u00a0\u00bb, Section 8 \u00ab\u00a0Other Measures of Performance\u00a0\u00bb, Section 10 \u00ab\u00a0Liquidity and Capital Resources\u00a0\u00bb and Section 16 \u00ab\u00a0Outlook\u00a0\u00bb in the MD&A of Choice Properties\u2019 Second Quarter 2014 Report to Unitholders. Forward-looking statements are typically identified by words such as \u00ab\u00a0expect\u00a0\u00bb, \u00ab\u00a0anticipate\u00a0\u00bb, \u00ab\u00a0believe\u00a0\u00bb, \u00ab\u00a0foresee\u00a0\u00bb, \u00ab\u00a0could\u00a0\u00bb, \u00ab\u00a0estimate\u00a0\u00bb, \u00ab\u00a0goal\u00a0\u00bb, \u00ab\u00a0intend\u00a0\u00bb, \u00ab\u00a0plan\u00a0\u00bb, \u00ab\u00a0seek\u00a0\u00bb, \u00ab\u00a0strive\u00a0\u00bb , \u00ab\u00a0will\u00a0\u00bb, \u00ab\u00a0may\u00a0\u00bb, \u00ab\u00a0should\u00a0\u00bb and similar expressions, as they relate to Choice Properties and its management.<\/p>\n Forward-looking statements reflect Choice Properties\u2019 current estimates, beliefs and assumptions, which are based on management\u2019s perception of historic trends, current conditions and expected future developments, as well as other factors it believes are appropriate in the circumstances. Choice Properties\u2019 expectation of operating and financial performance is based on certain assumptions, including assumptions about future growth potential, prospects and opportunities, industry trends, future levels of indebtedness, current tax laws, current economic conditions and no new competition in the market that leads to reduced revenues and profitability. Management\u2019s estimates, beliefs and assumptions are inherently subject to significant business, economic, competitive and other uncertainties and contingencies regarding future events and as such, are subject to change. Choice Properties can give no assurance that such estimates, beliefs and assumptions will prove to be correct.<\/p>\n Numerous risks and uncertainties could cause Choice Properties\u2019 actual results to differ materially from those expressed, implied or projected in the forward-looking statements, including, those described in Section 12 \u00ab\u00a0Enterprise Risks and Risk Management\u00a0\u00bb in the MD&A of Choice Properties\u2019 Second Quarter 2014 Report to Unitholders. Such risks and uncertainties include:<\/p>\n \n- changes in economic conditions, including changes in interest rates, and the rates of inflation or deflation;<\/li>\n
- the inability of Choice Properties to maintain and leverage its relationship with Loblaw, including in respect of: (i) Loblaw\u2019s retained interest in Choice Properties and its current intention with respect thereto; (ii) the services to be provided to Choice Properties (whether directly or indirectly) by Loblaw; (iii) expected transactions to be entered into between Loblaw and Choice Properties (including Choice Properties\u2019 acquisition of certain interests in properties held by Loblaw); and (iv) the Strategic Alliance Agreement presented in the Trust\u2019s prospectus dated June 26, 2013<\/span>;<\/li>\n
- changes in Loblaw\u2019s business, activities or circumstances which may impact Choice Properties, including Loblaw\u2019s inability to make rent payments or perform its obligations under the Loblaw leases;<\/li>\n
- failure to manage its growth effectively in accordance with its growth strategy or acquire assets on an accretive basis;<\/li>\n
- changes in Choice Properties\u2019 capital expenditure and fixed cost requirements;<\/li>\n
- the inability of the Partnership to make distributions or other payments or advances;<\/li>\n
- the inability of Choice Properties to obtain financing;<\/li>\n
- changes in Choice Properties\u2019 degree of financial leverage;<\/li>\n
- changes in laws or regulatory regimes, which may affect Choice Properties, including changes in the tax treatment of the Trust and its distributions to Unitholders or the inability of the Trust to continue to qualify as a \u00ab\u00a0mutual fund trust\u00a0\u00bb and as a \u00ab\u00a0real estate investment trust\u00a0\u00bb, as such terms are defined in the Income Tax Act<\/i> (Canada<\/span>);<\/li>\n
- changes in Choice Properties\u2019 competitiveness in the real estate market or the unavailability of desirable commercial real estate assets.<\/li>\n<\/ul>\n
This is not an exhaustive list of the factors that may affect Choice Properties\u2019 forward-looking statements. Other risks and uncertainties not presently known to Choice Properties could also cause actual results or events to differ materially from those expressed in its forward-looking statements. Additional risks and uncertainties are discussed in Choice Properties\u2019 materials filed with the Canadian securities regulatory authorities from time to time, including the Trust\u2019s 2013 Annual Information Form. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect Choice Properties\u2019 expectations only as of the date of this press release. Except as required by applicable law, Choice Properties does not undertake to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.<\/p>\n NON-GAAP Financial Measures<\/b><\/p>\n Choice Properties uses the following non-GAAP financial measures: FFO, AFFO, and NOI. The Trust believes these non-GAAP financial measures provide useful information to both management and investors in measuring the financial performance and financial condition of the Trust for the reasons outlined below.<\/p>\n Management uses these and other non-GAAP financial measures to exclude the impact of certain expenses and income that must be recognized under GAAP when analyzing underlying operating performance, as the excluded items are not necessarily reflective of Choice Properties\u2019 underlying operating performance or impact the comparability of financial performance between periods. From time to time, the Trust may exclude additional items if it believes doing so would result in a more effective analysis of underlying operating performance. The exclusion of certain items does not imply that they are non-recurring.<\/p>\n These measures do not have a standardized meaning prescribed by GAAP and therefore they may not be comparable to similarly titled measures presented by other publicly traded REITs, and should not be construed as an alternative to other financial measures determined in accordance with GAAP.<\/p>\n Net Operating Income <\/b>NOI is defined as cash rental revenue from investment properties less property operating costs. NOI is used as a key indicator of performance as it represents a measure over which management has control. The Trust evaluates performance of management by comparing the performance of the portfolio adjusted for the effects of certain items and current year acquisitions. The Trust\u2019s method of calculating NOI may differ from other issuers\u2019 methods and, accordingly, may not be comparable to NOI reported by other issuers.<\/p>\n Funds from Operations <\/b>FFO is not a term defined under IFRS and may not be comparable to similar measures used by other real estate entities. Except as otherwise noted, Choice Properties calculates its FFO in accordance with the Real Property Association of Canada White Paper on Funds from Operations for IFRS issued in April 2014<\/span>. The purpose of the White Paper was to provide reporting issuers and investors with greater guidance on the definition of FFO and to help promote more consistent disclosure from reporting issuers.<\/p>\nAn advantage of the FFO measure is improved comparability between Canadian and foreign REITs. FFO adds back to net income items that do not arise from operating activities, such as fair value adjustments. FFO, however, still includes non-cash revenues related to accounting for straight-line rent and makes no deduction for the recurring capital expenditures necessary to sustain the existing earnings stream.<\/p>\n Funds from Operations Payout Ratio <\/b>FFO payout ratio is calculated as the distributions per unit divided by the FFO per unit diluted.<\/p>\n Adjusted Funds from Operations <\/b>AFFO is a supplemental measure of operating performance widely used in the real estate industry. Choice Properties calculates AFFO by adjusting FFO for non-cash income and expense items such as amortization of straight-line rents and finance charges. AFFO includes a reduction for capital expenditures for maintaining productive capacity required for sustaining property infrastructure and revenue from real estate properties and direct leasing costs. Property capital expenditures do not occur evenly over the fiscal year. The property capital expenditures in the AFFO calculation are adjusted to reflect an average annual spending level.<\/p>\n There is currently no standard industry-defined measure of AFFO. As such, Choice Properties\u2019 method of calculating AFFO may differ from that of other real estate entities and, accordingly, may not be comparable to such amounts reported by other issuers.<\/p>\n Adjusted Funds from Operations Payout Ratio <\/b>AFFO payout ratio is calculated as the distributions per unit divided by the AFFO per unit diluted.<\/p>\n Choice Properties Real Estate Investment Trust <\/b>
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measure<\/b><\/p>\n\n\nFor the periods ended June 30, 2014
(in thousands of Canadian dollars, except per unit amounts) (unaudited)<\/td>\n | Second Quarter<\/b>
Actuals<\/b><\/td>\n | <\/td>\n | Second Quarter
Forecast<\/td>\n | <\/td>\n | Year-to-date<\/b>
Actuals<\/b><\/td>\n | <\/td>\n | Year-to-date
Forecast<\/td>\n | <\/td>\n<\/tr>\n | \n| Rental revenue<\/td>\n | $<\/b><\/td>\n | 170,339<\/b><\/td>\n | <\/td>\n | $<\/td>\n | 163,992<\/td>\n | <\/td>\n | $<\/b><\/td>\n | 337,384<\/b><\/td>\n | <\/td>\n | $<\/td>\n | 327,974<\/td>\n | <\/td>\n<\/tr>\n | \n| Reverse \u2013 Straight-line rental revenue<\/td>\n | <\/td>\n | (8,713)<\/b><\/td>\n | <\/td>\n | <\/td>\n | (8,098)<\/td>\n | <\/td>\n | <\/td>\n | (17,275)<\/b><\/td>\n | <\/td>\n | <\/td>\n | (16,196)<\/td>\n | <\/td>\n<\/tr>\n | \n| Property operating costs<\/td>\n | <\/td>\n | (42,945)<\/b><\/td>\n | <\/td>\n | <\/td>\n | (43,869)<\/td>\n | <\/td>\n | <\/td>\n | (86,096)<\/b><\/td>\n | <\/td>\n | <\/td>\n | (87,695)<\/td>\n | <\/td>\n<\/tr>\n | \nNet Operating Income(1)<\/sup><\/td>\n| $<\/b><\/td>\n | 118,681<\/b><\/td>\n | <\/td>\n | $<\/td>\n | 112,025<\/td>\n | <\/td>\n | $<\/b><\/td>\n | 234,013<\/b><\/td>\n | <\/td>\n | $<\/td>\n | 224,083<\/td>\n | <\/td>\n<\/tr>\n | \n| Net Income (Loss)<\/td>\n | $<\/b><\/td>\n | (1,538)<\/b><\/td>\n | <\/td>\n | $<\/td>\n | 33,854<\/td>\n | <\/td>\n | $<\/b><\/td>\n | (9,709)<\/b><\/td>\n | <\/td>\n | $<\/td>\n | 68,638<\/td>\n | <\/td>\n<\/tr>\n | \n| Fair value adjustments on Exchangeable Units<\/td>\n | <\/td>\n | (11,085)<\/b><\/td>\n | <\/td>\n | <\/td>\n | \u2014<\/td>\n | <\/td>\n | <\/td>\n | 37,208<\/b><\/td>\n | <\/td>\n | <\/td>\n | \u2014<\/td>\n | <\/td>\n<\/tr>\n | \n| Fair value adjustments on investment properties<\/td>\n | <\/td>\n | (201)<\/b><\/td>\n | <\/td>\n | <\/td>\n | \u2014<\/td>\n | <\/td>\n | <\/td>\n | (91)<\/b><\/td>\n | <\/td>\n | <\/td>\n | \u2014<\/td>\n | <\/td>\n<\/tr>\n | \n| Fair value adjustments on unit-based compensation<\/td>\n | <\/td>\n | (140)<\/b><\/td>\n | <\/td>\n | <\/td>\n | \u2014<\/td>\n | <\/td>\n | <\/td>\n | (228)<\/b><\/td>\n | <\/td>\n | <\/td>\n | \u2014<\/td>\n | <\/td>\n<\/tr>\n | \n| Distributions on Exchangeable Units<\/td>\n | <\/td>\n | 47,382<\/b><\/td>\n | <\/td>\n | <\/td>\n | 44,281<\/td>\n | <\/td>\n | <\/td>\n | 93,544<\/b><\/td>\n | <\/td>\n | <\/td>\n | 88,562<\/td>\n | <\/td>\n<\/tr>\n | \n| Amortization of tenant improvement allowances<\/td>\n | <\/td>\n | 2<\/b><\/td>\n | <\/td>\n | <\/td>\n | \u2014<\/td>\n | <\/td>\n | <\/td>\n | 452<\/b><\/td>\n | <\/td>\n | <\/td>\n | \u2014<\/td>\n | <\/td>\n<\/tr>\n | \nFunds from Operations(1)(3)<\/sup><\/td>\n| $<\/b><\/td>\n | 34,420<\/b><\/td>\n | <\/td>\n | $<\/td>\n | 78,135<\/td>\n | <\/td>\n | $<\/b><\/td>\n | 121,176<\/b><\/td>\n | <\/td>\n | $<\/td>\n | 157,200<\/td>\n | <\/td>\n<\/tr>\n | \n| Reverse: Finance charge<\/td>\n | <\/td>\n | 52,253<\/b><\/td>\n | <\/td>\n | <\/td>\n | \u2014<\/td>\n | <\/td>\n | <\/td>\n | 48,911<\/b><\/td>\n | <\/td>\n | <\/td>\n | \u2014<\/td>\n | <\/td>\n<\/tr>\n | \nFunds from Operations(1) <\/sup>excluding finance charge<\/td>\n| $<\/b><\/td>\n | 86,673<\/b><\/td>\n | <\/td>\n | $<\/td>\n | 78,135<\/td>\n | <\/td>\n | $<\/b><\/td>\n | 170,087<\/b><\/td>\n | <\/td>\n | $<\/td>\n | 157,200<\/td>\n | <\/td>\n<\/tr>\n | \nFunds from Operations(1)<\/sup><\/td>\n| $<\/b><\/td>\n | 34,420<\/b><\/td>\n | <\/td>\n | $<\/td>\n | 78,135<\/td>\n | <\/td>\n | $<\/b><\/td>\n | 121,176<\/b><\/td>\n | <\/td>\n | $<\/td>\n | 157,200<\/td>\n | <\/td>\n<\/tr>\n | \n| Straight-line rental revenue<\/td>\n | <\/td>\n | (8,713)<\/b><\/td>\n | <\/td>\n | <\/td>\n | (8,098)<\/td>\n | <\/td>\n | <\/td>\n | (17,275)<\/b><\/td>\n | <\/td>\n | <\/td>\n | (16,196)<\/td>\n | <\/td>\n<\/tr>\n | \n| Amortization of finance charges<\/td>\n | <\/td>\n | 52,642<\/b><\/td>\n | <\/td>\n | <\/td>\n | 911<\/td>\n | <\/td>\n | <\/td>\n | 50,755<\/b><\/td>\n | <\/td>\n | <\/td>\n | 1,616<\/td>\n | <\/td>\n<\/tr>\n | \n| Unit-based compensation expense<\/td>\n | <\/td>\n | 641<\/b><\/td>\n | <\/td>\n | <\/td>\n | 360<\/td>\n | <\/td>\n | <\/td>\n | 1,058<\/b><\/td>\n | <\/td>\n | <\/td>\n | 576<\/td>\n | <\/td>\n<\/tr>\n | \nProperty capital expenditures <\/sup>\u2013 incurred<\/td>\n| <\/td>\n | (2,266)<\/b><\/td>\n | <\/td>\n | <\/td>\n | (7,323)<\/td>\n | <\/td>\n | <\/td>\n | (2,742)<\/b><\/td>\n | <\/td>\n | <\/td>\n | (14,646)<\/td>\n | <\/td>\n<\/tr>\n | \nProperty capital expenditures \u2013 normalized(2)<\/sup><\/td>\n| <\/td>\n | (6,837)<\/b><\/td>\n | <\/td>\n | <\/td>\n | \u2014<\/td>\n | <\/td>\n | <\/td>\n | (12,578)<\/b><\/td>\n | <\/td>\n | <\/td>\n | \u2014<\/td>\n | <\/td>\n<\/tr>\n | \n| Leasing capital expenditures<\/td>\n | <\/td>\n | (122)<\/b><\/td>\n | <\/td>\n | <\/td>\n | (694)<\/td>\n | <\/td>\n | <\/td>\n | (1,922)<\/b><\/td>\n | <\/td>\n | <\/td>\n | (1,388)<\/td>\n | <\/td>\n<\/tr>\n | \nAdjusted Funds from Operations(1)<\/sup><\/td>\n| $<\/b><\/td>\n | 69,765<\/b><\/td>\n | <\/td>\n | $<\/td>\n | 63,291<\/td>\n | <\/td>\n | $<\/b><\/td>\n | 138,472<\/b><\/td>\n | <\/td>\n | $<\/td>\n | 127,162<\/td>\n | <\/td>\n<\/tr>\n | \nAFFO(1)<\/sup> per unit \u2013 basic<\/td>\n| $<\/b><\/td>\n | 0.184<\/b><\/td>\n | <\/td>\n | $<\/td>\n | 0.179<\/td>\n | <\/td>\n | $<\/b><\/td>\n | 0.369<\/b><\/td>\n | <\/td>\n | $<\/td>\n | 0.359<\/td>\n | <\/td>\n<\/tr>\n | \nAFFO(1)<\/sup> per unit \u2013 diluted<\/td>\n| $<\/b><\/td>\n | 0.184<\/b><\/td>\n | <\/td>\n | $<\/td>\n | 0.179<\/td>\n | <\/td>\n | $<\/b><\/td>\n | 0.369<\/b><\/td>\n | <\/td>\n | $<\/td>\n | 0.359<\/td>\n | <\/td>\n<\/tr>\n | \nAFFO(1)<\/sup> payout ratio<\/td>\n| <\/td>\n | 88.3<\/b><\/td>\n | %<\/b><\/td>\n | <\/td>\n | 90.8<\/td>\n | %<\/td>\n | <\/td>\n | 88.1<\/b><\/td>\n | %<\/b><\/td>\n | <\/td>\n | 90.5<\/td>\n | %<\/td>\n<\/tr>\n | \n| Distribution per unit<\/td>\n | $<\/b><\/td>\n | 0.162501<\/b><\/td>\n | <\/td>\n | $<\/td>\n | 0.162501<\/td>\n | <\/td>\n | $<\/b><\/td>\n | 0.325002<\/b><\/td>\n | <\/td>\n | $<\/td>\n | 0.325002<\/td>\n | <\/td>\n<\/tr>\n | \n| Weighted average Units outstanding \u2013 basic<\/td>\n | <\/td>\n | 379,146,225<\/b><\/td>\n | <\/td>\n | <\/td>\n | 353,997,871<\/td>\n | <\/td>\n | <\/td>\n | 375,521,228<\/b><\/td>\n | <\/td>\n | <\/td>\n | 353,997,871<\/td>\n | <\/td>\n<\/tr>\n | \n| Weighted average Units outstanding \u2013 diluted<\/td>\n | <\/td>\n | 379,658,338<\/b><\/td>\n | <\/td>\n | <\/td>\n | 353,997,871<\/td>\n | <\/td>\n | <\/td>\n | 375,766,533<\/b><\/td>\n | <\/td>\n | <\/td>\n | 353,997,871<\/td>\n | <\/td>\n<\/tr>\n | \n| Number of Units outstanding, end of quarter<\/td>\n | <\/td>\n | 383,670,554<\/b><\/td>\n | <\/td>\n | <\/td>\n | 353,997,871<\/td>\n | <\/td>\n | <\/td>\n | 383,670,554<\/b><\/td>\n | <\/td>\n | <\/td>\n | 353,997,871<\/td>\n | <\/td>\n<\/tr>\n<\/table>\n\n\n| (1)<\/td>\n | See \u00ab\u00a0Non-GAAP Financial Measures\u00a0\u00bb beginning on page 4.<\/td>\n<\/tr>\n | \n| (2)<\/td>\n | Seasonality impacts the timing of capital expenditures. The AFFO calculation was adjusted for this factor to make the quarters more comparable.<\/td>\n<\/tr>\n | \n| (3)<\/td>\n | FFO per unit on a diluted basis is $0.091 and $0.322 for the three months and six months periods respectively, before the reversal for finance charge related to the Transferor Notes transactions.<\/td>\n<\/tr>\n<\/table>\n Selected Financial Information <\/b>
The following includes quarterly financial information prepared by management in accordance with IFRS and based on the Trust\u2019s Second Quarter 2014 Report to Unitholders. This financial information does not contain all interim period disclosures required by IFRS, and accordingly should be read in conjunction with the Trust\u2019s Prospectus, dated June 26, 2013<\/span>, and 2013 Report to Unitholders, which are available in the Investor Relations section of the Trust\u2019s website at www.choicereit.ca<\/a>.<\/p>\nChoice Properties Real Estate Investment Trust<\/b>
Consolidated Balance Sheets<\/b><\/p>\n\n\n| <\/td>\n | <\/td>\n | As at June 30, 2014<\/b><\/td>\n | <\/td>\n | As at December 31, 2013<\/td>\n<\/tr>\n | \n| (in thousands of Canadian dollars) (unaudited)<\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| Assets<\/b><\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| Non-current Assets<\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | Investment properties<\/td>\n | <\/td>\n | $<\/b><\/td>\n | 7,524,823<\/b><\/td>\n | <\/td>\n | $<\/td>\n | 7,287,759<\/td>\n<\/tr>\n | \n| <\/td>\n | Accounts receivable and other assets<\/td>\n | <\/td>\n | <\/td>\n | 6,255<\/b><\/td>\n | <\/td>\n | <\/td>\n | 7,693<\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | 7,531,078<\/b><\/td>\n | <\/td>\n | <\/td>\n | 7,295,452<\/td>\n<\/tr>\n | \n| Current Assets<\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | Accounts receivable and other assets<\/td>\n | <\/td>\n | <\/td>\n | 159,322<\/b><\/td>\n | <\/td>\n | <\/td>\n | 100,885<\/td>\n<\/tr>\n | \n| <\/td>\n | Assets held for sale<\/td>\n | <\/td>\n | <\/td>\n | 13,480<\/b><\/td>\n | <\/td>\n | <\/td>\n | \u2014<\/td>\n<\/tr>\n | \n| <\/td>\n | Cash and cash equivalents<\/td>\n | <\/td>\n | <\/td>\n | 14,868<\/b><\/td>\n | <\/td>\n | <\/td>\n | 51,405<\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | 187,670<\/b><\/td>\n | <\/td>\n | <\/td>\n | 152,290<\/td>\n<\/tr>\n | \n| Total Assets<\/b><\/td>\n | <\/td>\n | $<\/b><\/td>\n | 7,718,748<\/b><\/td>\n | <\/td>\n | $<\/td>\n | 7,447,742<\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| Liabilities and Unitholders\u2019 Equity<\/b><\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| Non-current Liabilities<\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | Long term debt and Class C LP Units<\/td>\n | <\/td>\n | $<\/b><\/td>\n | 3,434,244<\/b><\/td>\n | <\/td>\n | $<\/td>\n | 3,286,442<\/td>\n<\/tr>\n | \n| <\/td>\n | Credit facility<\/td>\n | <\/td>\n | <\/td>\n | 89,981<\/b><\/td>\n | <\/td>\n | <\/td>\n | \u2014<\/td>\n<\/tr>\n | \n| <\/td>\n | Exchangeable Units<\/td>\n | <\/td>\n | <\/td>\n | 3,145,306<\/b><\/td>\n | <\/td>\n | <\/td>\n | 2,988,466<\/td>\n<\/tr>\n | \n| <\/td>\n | Trade payables and other liabilities<\/td>\n | <\/td>\n | <\/td>\n | 976<\/b><\/td>\n | <\/td>\n | <\/td>\n | 379<\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | 6,670,507<\/b><\/td>\n | <\/td>\n | <\/td>\n | 6,275,287<\/td>\n<\/tr>\n | \n| Current Liabilities<\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | Long term debt due within one year<\/td>\n | <\/td>\n | <\/td>\n | \u2014<\/b><\/td>\n | <\/td>\n | <\/td>\n | 89,725<\/td>\n<\/tr>\n | \n| <\/td>\n | Trade payables and other liabilities<\/td>\n | <\/td>\n | <\/td>\n | 207,482<\/b><\/td>\n | <\/td>\n | <\/td>\n | 211,078<\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | 207,482<\/b><\/td>\n | <\/td>\n | <\/td>\n | 300,803<\/td>\n<\/tr>\n | \n| Total Liabilities<\/td>\n | <\/td>\n | <\/td>\n | 6,877,989<\/b><\/td>\n | <\/td>\n | <\/td>\n | 6,576,090<\/td>\n<\/tr>\n | \n| Unitholders\u2019 Equity<\/td>\n | <\/td>\n | <\/td>\n | 840,759<\/b><\/td>\n | <\/td>\n | <\/td>\n | 871,652<\/td>\n<\/tr>\n | \n| Total Liabilities and Unitholders\u2019 Equity<\/b><\/td>\n | <\/td>\n | $<\/b><\/td>\n | 7,718,748<\/b><\/td>\n | <\/td>\n | $<\/td>\n | 7,447,742<\/td>\n<\/tr>\n<\/table>\n Choice Properties Real Estate Investment Trust <\/b>
Consolidated Statement Loss and Comprehensive Loss<\/b><\/p>\n\n\n| (in thousands of Canadian dollars) (unaudited)<\/td>\n | Quarter ended <\/b>
June 30, 2014<\/b><\/td>\n | <\/td>\n | Year-to-date <\/b>
June 30, 2014<\/b><\/td>\n<\/tr>\n\n| Net Property Income<\/b><\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | Rental revenue from investment properties<\/td>\n | $<\/b><\/td>\n | 170,339<\/b><\/td>\n | <\/td>\n | $<\/b><\/td>\n | 337,384<\/b><\/td>\n<\/tr>\n\n| <\/td>\n | Property operating costs<\/td>\n | <\/td>\n | (42,945)<\/b><\/td>\n | <\/td>\n | <\/td>\n | (86,096)<\/b><\/td>\n<\/tr>\n\n| Net Property Income<\/td>\n | <\/td>\n | 127,394<\/b><\/td>\n | <\/td>\n | <\/td>\n | 251,288<\/b><\/td>\n<\/tr>\n\n| Other Expenses<\/b><\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | General and administrative expenses<\/td>\n | <\/td>\n | (5,362)<\/b><\/td>\n | <\/td>\n | <\/td>\n | (10,691)<\/b><\/td>\n<\/tr>\n\n| <\/td>\n | Amortization of other assets<\/td>\n | <\/td>\n | (132)<\/b><\/td>\n | <\/td>\n | <\/td>\n | (263)<\/b><\/td>\n<\/tr>\n\n| <\/td>\n | Net interest expense and other financing charges<\/td>\n | <\/td>\n | (134,724)<\/b><\/td>\n | <\/td>\n | <\/td>\n | (212,926)<\/b><\/td>\n<\/tr>\n\n| <\/td>\n | Fair value adjustment on Exchangeable Units<\/td>\n | <\/td>\n | 11,085<\/b><\/td>\n | <\/td>\n | <\/td>\n | (37,208)<\/b><\/td>\n<\/tr>\n\n| <\/td>\n | Fair value adjustment on investment properties<\/td>\n | <\/td>\n | 201<\/b><\/td>\n | <\/td>\n | <\/td>\n | 91<\/b><\/td>\n<\/tr>\n\n| Net Loss and Comprehensive Loss<\/b><\/td>\n | $<\/b><\/td>\n | (1,538)<\/b><\/td>\n | <\/td>\n | $<\/b><\/td>\n | (9,709)<\/b><\/td>\n<\/tr>\n<\/table>\n Choice Properties Real Estate Investment Trust <\/b>
Consolidated Statement of Cash Flows<\/b><\/p>\n\n\n| (in thousands of Canadian dollars) (Unaudited)<\/td>\n | <\/td>\n | Quarter ended<\/b>
June 30, 2013<\/b><\/td>\n | <\/td>\n | Year-to-date<\/b>
June 30, 2014<\/b><\/td>\n<\/tr>\n\n| Operating Activities<\/b><\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | Net Loss<\/td>\n | <\/td>\n | $<\/b><\/td>\n | (1,538)<\/b><\/td>\n | <\/td>\n | $<\/b><\/td>\n | (9,709)<\/b><\/td>\n<\/tr>\n\n| <\/td>\n | Amortization of straight-line rent<\/td>\n | <\/td>\n | <\/td>\n | (8,713)<\/b><\/td>\n | <\/td>\n | <\/td>\n | (17,275)<\/b><\/td>\n<\/tr>\n\n| <\/td>\n | Amortization of tenant improvement allowances<\/td>\n | <\/td>\n | <\/td>\n | 2<\/b><\/td>\n | <\/td>\n | <\/td>\n | 452<\/b><\/td>\n<\/tr>\n\n| <\/td>\n | Amortization of other assets<\/td>\n | <\/td>\n | <\/td>\n | 132<\/b><\/td>\n | <\/td>\n | <\/td>\n | 263<\/b><\/td>\n<\/tr>\n | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |