Latest news with #MichelLéonard
Yahoo
15-05-2025
- Business
- Yahoo
Triple-I/Milliman: U.S. P/C Insurance Reports Best Underwriting Results Since 2013, But California Wildfire Losses and Potential Economic Impacts of Tariffs Pose Challenges
MALVERN, Pa., May 15, 2025--(BUSINESS WIRE)--The U.S. property/casualty (P/C) insurance industry reported a net combined ratio (NCR) of 96.6 in 2024 – a year-over-year (YoY) improvement of 5.1 points and the industry's best underwriting performance since 2013, according to the latest report -- Insurance Economics and Underwriting Projections: A Forward View – from the Insurance Information Institute (Triple-I) and Milliman, a collaborating partner. However, losses from the January California wildfires and emerging economic challenges from tariffs could weigh on industry performance in 2025, potentially offsetting recent momentum. Key 2024 Highlights: Personal lines narrowed the profitability gap with commercial lines, as both segments reported net combined ratios under 100 for the year. Personal auto reported a 2024 NCR of 95.3, a 9.6-point improvement YoY, driven by double-digit net written premium (NWP) growth of 14.4% in 2023 and 12.8% in 2024. Homeowners' 2024 NCR of 99.7 marked an 11.2-point improvement over 2023, the first sub-100 result since 2019. The 2024 NWP growth rate of 13.6% was the highest in over 15 years, up from 12.4% in 2023. Challenges on the Horizon: General liability continues to soften, posting its worst NCR since 2016, and the third worst since 2010. The January 2025 Los Angeles County wildfires are expected to drive the worst Q1 performance for the P/C industry in more than 15 years, adding pressure to early-year underwriting results. For tariffs already in place as of early May 2025, the impact on underlying growth and replacement costs shows signs of negative effects, starting with personal auto, followed by homeowners and renters, commercial auto and commercial property. Michel Léonard, Ph.D., CBE, chief economist and data scientist at Triple-I, noted that P/C underlying economic growth in 2025 was twice that of U.S. gross domestic product (GDP) growth, at 5% compared to 2.5% YoY. Additionally, P/C replacement costs are expected to increase at a slower pace than the overall U.S. Consumer Price Index (CPI), with rates projected at 1.0% versus 2.0% YoY. "While P/C economic drivers continue to outperform the broader U.S. economy – with stronger growth and lower replacement cost inflation – we now anticipate a shift in 2025 due to ongoing and expanded tariffs," said Léonard. "These headwinds are expected to slow the sector's momentum, potentially leading to a contraction later in the year that could exceed the overall GDP slowdown. Additionally, replacement costs, initially projected to rise more slowly than CPI, may accelerate and begin to outpace it, adding further pressure. Even though rising costs may lead to additional premium increases, these will likely be insufficient to offset slowing consumer spending and corporate investment." Jason B. Kurtz, FCAS, MAAA, a principal and consulting actuary at Milliman, a premier global consulting and actuarial firm, noted that adverse prior year development (PYD) for commercial auto and general liability continues to be a significant drag on profitability, having increased for three consecutive years. Regarding general liability, Kurtz said the line experienced significant reserve strengthening during 2024. "The 2024 net combined ratio of 110 included a staggering nine points of adverse prior year development, amounting to more than $9 billion of reserve strengthening, the highest seen in at least 15 years. It is also concerning that the hard-market years 2020-2023, which saw significant rate increases, are also seeing reserve increases," Kurtz said. Turning to workers' compensation, Kurtz said combined ratios once again benefited from double-digit favorable PYD for the eighth consecutive year. Donna Glenn, FCAS, MAAA, chief actuary at the National Council on Compensation Insurance (NCCI), provided a preview of this year's average lost cost level changes and discussed the long-term financial health of the workers' compensation system. "The workers' compensation system continues an era of exceptional performance with strong results and a financially healthy line," said Glenn. "And while there are early indications of potential headwinds on the horizon, the industry is positioned well to navigate these challenges." Note to News Media: Insurance Economics and Underwriting Projections: A Forward View is a quarterly report offered exclusively to Triple-I members and Milliman customers. Members of the news media may request copies for reporting purposes only. About the Insurance Information Institute (Triple-I) Since 1960, the Insurance Information Institute (Triple-I) has been the trusted voice of risk and insurance, delivering unique, data-driven insights to educate, elevate and connect consumers, industry professionals, policymakers and the media. An affiliate of The Institutes, Triple-I represents a diverse membership accounting for nearly 50% of all U.S. property/casualty premiums written. Our members include mutual and stock companies, personal and commercial lines, primary insurers and reinsurers – serving regional, national and global markets. About The Institutes The Institutes® are a not-for-profit comprised of diverse affiliates that educate, elevate, and connect people in the essential disciplines of risk management and insurance. Through products and services offered by The Institutes and nearly 20 affiliated business units, people and organizations are empowered to help those in need with a focus on understanding, predicting, and preventing losses to create a more resilient world. The Institutes is a registered trademark of The Institutes. All rights reserved. About Milliman Milliman leverages deep expertise, actuarial rigor, and advanced technology to develop solutions for a world at risk. We help clients in the public and private sectors navigate urgent, complex challenges—from extreme weather and market volatility to financial insecurity and rising health costs—so they can meet their business, financial, and social objectives. Our solutions encompass insurance, financial services, healthcare, life sciences, and employee benefits. Founded in 1947, Milliman is an independent firm with offices in major cities around the globe. For further information, visit View source version on Contacts Triple-I: Loretta Worters, lorettaw@ Milliman: Jeremy Engdahl-Johnson, Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Wire
15-05-2025
- Business
- Business Wire
Triple-I/Milliman: U.S. P/C Insurance Reports Best Underwriting Results Since 2013, But California Wildfire Losses and Potential Economic Impacts of Tariffs Pose Challenges
MALVERN, Pa.--(BUSINESS WIRE)--The U.S. property/casualty (P/C) insurance industry reported a net combined ratio (NCR) of 96.6 in 2024 – a year-over-year (YoY) improvement of 5.1 points and the industry's best underwriting performance since 2013, according to the latest report -- Insurance Economics and Underwriting Projections: A Forward View – from the Insurance Information Institute (Triple-I) and Milliman, a collaborating partner. However, losses from the January California wildfires and emerging economic challenges from tariffs could weigh on industry performance in 2025, potentially offsetting recent momentum. 'While P/C economic drivers continue to outperform the broader U.S. economy – with stronger growth and lower replacement cost inflation – we now anticipate a shift in 2025 due to ongoing and expanded tariffs." Key 2024 Highlights: Personal lines narrowed the profitability gap with commercial lines, as both segments reported net combined ratios under 100 for the year. Personal auto reported a 2024 NCR of 95.3, a 9.6-point improvement YoY, driven by double-digit net written premium (NWP) growth of 14.4% in 2023 and 12.8% in 2024. Homeowners' 2024 NCR of 99.7 marked an 11.2-point improvement over 2023, the first sub-100 result since 2019. The 2024 NWP growth rate of 13.6% was the highest in over 15 years, up from 12.4% in 2023. Challenges on the Horizon: General liability continues to soften, posting its worst NCR since 2016, and the third worst since 2010. The January 2025 Los Angeles County wildfires are expected to drive the worst Q1 performance for the P/C industry in more than 15 years, adding pressure to early-year underwriting results. For tariffs already in place as of early May 2025, the impact on underlying growth and replacement costs shows signs of negative effects, starting with personal auto, followed by homeowners and renters, commercial auto and commercial property. Michel Léonard, Ph.D., CBE, chief economist and data scientist at Triple-I, noted that P/C underlying economic growth in 2025 was twice that of U.S. gross domestic product (GDP) growth, at 5% compared to 2.5% YoY. Additionally, P/C replacement costs are expected to increase at a slower pace than the overall U.S. Consumer Price Index (CPI), with rates projected at 1.0% versus 2.0% YoY. 'While P/C economic drivers continue to outperform the broader U.S. economy – with stronger growth and lower replacement cost inflation – we now anticipate a shift in 2025 due to ongoing and expanded tariffs,' said Léonard. 'These headwinds are expected to slow the sector's momentum, potentially leading to a contraction later in the year that could exceed the overall GDP slowdown. Additionally, replacement costs, initially projected to rise more slowly than CPI, may accelerate and begin to outpace it, adding further pressure. Even though rising costs may lead to additional premium increases, these will likely be insufficient to offset slowing consumer spending and corporate investment.' Jason B. Kurtz, FCAS, MAAA, a principal and consulting actuary at Milliman, a premier global consulting and actuarial firm, noted that adverse prior year development (PYD) for commercial auto and general liability continues to be a significant drag on profitability, having increased for three consecutive years. Regarding general liability, Kurtz said the line experienced significant reserve strengthening during 2024. 'The 2024 net combined ratio of 110 included a staggering nine points of adverse prior year development, amounting to more than $9 billion of reserve strengthening, the highest seen in at least 15 years. It is also concerning that the hard-market years 2020-2023, which saw significant rate increases, are also seeing reserve increases,' Kurtz said. Turning to workers' compensation, Kurtz said combined ratios once again benefited from double-digit favorable PYD for the eighth consecutive year. Donna Glenn, FCAS, MAAA, chief actuary at the National Council on Compensation Insurance (NCCI), provided a preview of this year's average lost cost level changes and discussed the long-term financial health of the workers' compensation system. 'The workers' compensation system continues an era of exceptional performance with strong results and a financially healthy line,' said Glenn. 'And while there are early indications of potential headwinds on the horizon, the industry is positioned well to navigate these challenges.' Note to News Media: Insurance Economics and Underwriting Projections: A Forward View is a quarterly report offered exclusively to Triple-I members and Milliman customers. Members of the news media may request copies for reporting purposes only. About the Insurance Information Institute (Triple-I) Since 1960, the Insurance Information Institute (Triple-I) has been the trusted voice of risk and insurance, delivering unique, data-driven insights to educate, elevate and connect consumers, industry professionals, policymakers and the media. An affiliate of The Institutes, Triple-I represents a diverse membership accounting for nearly 50% of all U.S. property/casualty premiums written. Our members include mutual and stock companies, personal and commercial lines, primary insurers and reinsurers – serving regional, national and global markets. About The Institutes The Institutes® are a not-for-profit comprised of diverse affiliates that educate, elevate, and connect people in the essential disciplines of risk management and insurance. Through products and services offered by The Institutes and nearly 20 affiliated business units, people and organizations are empowered to help those in need with a focus on understanding, predicting, and preventing losses to create a more resilient world. The Institutes is a registered trademark of The Institutes. All rights reserved. About Milliman Milliman leverages deep expertise, actuarial rigor, and advanced technology to develop solutions for a world at risk. We help clients in the public and private sectors navigate urgent, complex challenges—from extreme weather and market volatility to financial insecurity and rising health costs—so they can meet their business, financial, and social objectives. Our solutions encompass insurance, financial services, healthcare, life sciences, and employee benefits. Founded in 1947, Milliman is an independent firm with offices in major cities around the globe. For further information, visit
Cision Canada
05-05-2025
- Business
- Cision Canada
BTB delivers strong Q1 2025 revenue growth of 5.4% Français
MONTRÉAL , May 5, 2025 /CNW/ - BTB Real Estate Investment Trust (TSX: (" BTB", the " REIT" or the " Trust") announced today its financial results for the first quarter of 2025 ended March 31, 2025 (the " First Quarter"). "The first quarter of 2025 was marked by prudent financial management as we sail through uncertain economic times. Our strategic decisions show strong and consistent results, keeping us aligned with our commitment to operational excellence, strategic growth and financial prudence." says Michel Léonard, President and CEO of BTB. "Our operating results this quarter reflect the strength of our leasing and operational efforts. Our net operating income rose by 8.0% compared to the same period last year, totaling $19.8 M. This increase reflects the impact of operational improvements, higher rent achieved in lease renewals, organic increases in rent for in-place leases and an indemnity payment of $1.0 M received from a tenant who cancelled part of its lease prior to its expiration, which space has already been leased by the Trust. Based on those results, our FFO adjusted rose to 11.1¢ per unit, increasing by 8.8% compared to Q1 2024. Additionally, our rental revenue increased by 5.4% to stand at $34.4 M, with an average rent renewal rate increase of 5.1% during the quarter. Our occupancy rate dipped slightly to 92.5% but remained stable despite a previously announced tenant bankruptcy." SUMMARY OF SIGNIFICANT ITEMS AS AT MARCH 31st, 2025 Total number of properties: 75 Total leasable area: 6.1 million square feet Total asset value: $1.3 billion Market capitalization: $300 million (unit trading price of $3.40 as at March 31, 2025) OPERATIONAL HIGHLIGHTS Periods ended March 31 Qua rter 2025 2024 Occupancy – committed (%) 92.5 % 94.5 % Signed new leases (in 56,628 58,062 Renewed leases at term (in 77,504 91,791 Renewal rate (%) 54.6 % 67.7 % Early lease renewals (in 4,372 3,747 Average lease renewal rate 5.1 % 8.4 % BTB completed a total of 81,876 square feet of lease renewals and 56,628 square feet of new leases for the quarter. The occupancy rate stood at 92.5%, representing a 20 basis points decrease compared to the prior quarter, and a 200 basis points decrease compared to the same period in 2024. The increase in the average renewal rate for the quarter was 5.1%. FINANCIAL RESULTS HIGHLIGHTS Periods ended March 31 Qua rter (in thousands of dollars, except for ratios and per unit data) 2025 2024 $ $ Rental revenue 34,411 32,636 Net operating income (NOI) 19,821 18,360 Net income and comprehensive income 7,608 7,153 Adjusted EBITDA (1) 18,235 17,036 Same-property NOI (1) 19,450 18,121 FFO Adjusted (1) 9,880 8,925 FFO adjusted payout ratio 67.4 % 73.5 % AFFO Adjusted (1) 9,167 7,819 AFFO adjusted payout ratio 72.7 % 83.9 % FINANCIAL RESULTS PER UNIT Net income and comprehensive income 8.6¢ 8.2¢ Distributions 7.5¢ 7.5¢ FFO Adjusted (1) 11.1¢ 10.2¢ AFFO Adjusted (1) 10.3¢ 8.9¢ __________________________________________ (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. Rental revenue: Stood at $34.4 million for the quarter, which represents an increase of 5.4% compared to the same quarter of 2024. Net operating income (NOI): Totalled $19.8 million for the quarter, which represents an increase of 8.0% compared to the same quarter of 2024. The increase is driven by : (1) a partial lease cancellation payment of $1.0 million from a tenant in the suburban office segment which space has already been leased by the Trust; (2) operating improvements, higher rent renewal rates, and increases in rental spreads for in-place leases ($0.3 million); and (3) the new Winners/HomeSense lease which begun in February 25, 2025 ($0.1 million). Net income and comprehensive income: Totalled $7.6 million, which represents an increase of 6.4% or $0.5 million. The result for the quarter is affected by: (1) an increase in NOI of $1.5 million; and (2) a $0.5 million decrease in administrative expenses which are partly offset by (3) a $0.6 million increase in net financial expenses before fair value adjustments; and (4) a $1.1 million non-cash loss in the net adjustment of the fair value of derivative financial instruments. Same-property NOI (1): For the quarter, the same-property NOI increased by 7.3% compared to the same period in 2024. FFO adjusted per unit (1): Was 11.1¢ per unit for the quarter compared to 10.2¢ per unit for the same period in 2024, representing an increase of 0.9¢ per unit or 8.8%. The increase is explained by the previously outlined increase in NOI, decrease in administrative expenses and increase in net financial expenses before fair value adjustments. FFO adjusted per unit is negatively impacted by an increase in weighted average number of units outstanding of 1.3 million units compared to the same period in 2024. To nullify this dilution, the Trust suspended the distribution reinvestment plan ("DRIP") on February 24, 2025. FFO adjusted payout ratio (1): Was 67.4% for the quarter compared to 73.5% for the same period in 2024, a decrease of 6.1%. AFFO adjusted per unit (1): Was 10.3¢ per unit for the quarter compared to 8.9¢ per unit for the same period in 2024, representing an increase of 1.4¢ per unit or 15.7%, in line with the increase of FFO adjusted. AFFO adjusted payout ratio (1): Was 72.7% for the current quarter compared to 83.9% for the same period in 2024, a decrease of 11.2%. ________________________________ (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. BALANCE SHEET AND LIQUIDITY HIGHLIGHTS Periods ended March 31 Quarters (in thousands of dollars, except for ratios and per unit data) 2025 2024 $ $ Total assets 1,264,459 1,229,194 Total debt ratio (1) 57.7 % 58.3 % Mortgage debt ratio (2) 52.1 % 51.3 % Weighted average interest rate on mortgage debt 4.35 % 4.40 % Market capitalization 299,979 275,102 NAV per unit (1) 5.58 5.47 Debt metrics: BTB ended the quarter with a total debt ratio (1) of 57.7%, recording a decrease of 20 basis points compared to December 31, 2024. The Trust ended the quarter with a mortgage debt ratio (1) of 52.1%, a decrease of 70 basis points compared to December 31, 2024. Liquidity position: The Trust held $5.5 million of cash at the end of the quarter and $25.2 million is available under its credit facilities. (3) Debentures: On January 23, 2025, the Trust issued Series I convertible, unsecured, subordinated debentures bearing 7.25% interest payable semi-annually and maturing on February 28, 2030, in the amount of $40.25 million. The Serie I debentures are convertible at the holder's option at any time before February 28, 2030, at a conversion price of $4.10 per unit. On February 24, 2025, the Trust fully redeemed and paid at maturity the Series H convertible debentures at their nominal value of $19.9 million. Distribution reinvestment plan ("DRIP"): On February 24, 2025, the Trust suspended the distribution reinvestment plan ("DRIP"). Until further notice, unitholders who were enrolled in the DRIP will automatically receive distribution payments in the form of cash. Computershare Trust Company of Canada, as administrator of the DRIP, has already or will forward a notice and related documentation to all current DRIP participants. ___________________________________________________ (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, May 6 th, 2025, at 9 am, Eastern Time, to present BTB's financial results and performance for the first quarter of 2025. 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 May 13th, 2025, by dialing: 1-289-819-1450 (local) or, 1-888-660-6345 (toll free) and by entering the following access code: 68817 # 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 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 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 remove the impact of non-recurring items such as transaction cost on acquisitions and dispositions of investment properties and early repayment fees. The Trust believes FFO and 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 non-recurring items such as 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 recurring economic earnings and relevant in understanding its ability to service its debt, fund capital expenditures and provide distributions to unitholders. NON-IFRS MEASURE DEFINITION FFO and AFFO per unit and FFO adjusted and AFFO adjusted per unit FFO and AFFO per unit and FFO adjusted and AFFO adjusted per unit 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 ratios are calculated by dividing the FFO, AFFO, FFO adjusted and AFFO adjusted by the Weighted average number of units and Class B LP units outstanding. The Trust believes these metrics to be key measures of operating performances allowing the investors to compare its historical performance in relation to an individual per unit investment in the Trust. 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. Total Mortgage Debt Ratio Mortgage debt ratio is a non-IFRS financial measure of the Trust financial leverage, which is calculated by taking the total mortgage 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 mortgage 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. 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: 2025 2024 2024 2024 2024 2023 2023 2023 Q-1 Q-4 Q-3 Q-2 Q-1 Q-4 Q-3 Q-2 (in thousands of dollars, except for per unit) $ $ $ $ $ $ $ $ Net income and comprehensive income (IFRS) 7,608 18,847 5,470 7,272 7,153 1,734 15,216 10,846 Fair value adjustment on investment properties - (9,975) (283) - (6) 4,480 (6,481) - Fair value adjustment on Class B LP units 28 (174) 335 (21) 160 (42) (159) (775) Amortization of lease incentives 797 966 807 704 690 641 664 750 Fair value adjustment on derivative financial instruments 868 (760) 2,168 379 (325) 2,396 (584) (763) Leasing payroll expenses 466 739 535 433 591 401 359 327 Distributions – Class B LP units 52 52 52 53 52 52 56 42 Unit-based compensation (Unit price remeasurement) 61 (39) 342 63 409 (11) (87) (232) FFO (1) 9,880 9,656 9,426 8,883 8,724 9,651 8,984 10,195 Transaction costs on disposition of investment properties and mortgage early repayment fees - - - 266 201 37 46 - FFO Adjusted (1) 9,880 9,656 9,426 9,149 8,925 9,688 9,030 10,195 FFO per unit (1) (2) (3) 11.1¢ 10.9¢ 10.7¢ 10.1¢ 10.0¢ 11.1¢ 10.3¢ 11.8¢ FFO Adjusted per unit (1) (2) (4) 11.1¢ 10.9¢ 10.7¢ 10.4¢ 10.2¢ 11.1¢ 10.4¢ 11.8¢ FFO payout ratio (1) 67.4 % 68.8 % 70.0 % 74.3 % 75.2 % 67.5 % 72.9 % 63.8 % FFO Adjusted payout ratio (1) 67.4 % 68.8 % 70.3 % 72.2 % 73.5 % 67.2 % 72.5 % 63.8 % (1) This is a non-IFRS financial measure, refer to appendix 1. (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). _____________________________________________ 1 This is a non-IFRS financial measure, refer to page 5 and 6. Adjusted Funds from Operations (AFFO) (1) The following table provides a reconciliation of FFO (1) and AFFO (1) for the last eight quarters: 2025 2024 2024 2024 2024 2023 2023 2023 Q-1 Q-4 Q-3 Q-2 Q-1 Q-4 Q-3 Q-2 (in thousands of dollars, except for per unit) $ $ $ $ $ $ $ $ FFO (1) 9,880 9,656 9,426 8,883 8,724 9,651 8,984 10,195 Straight-line rental revenue adjustment (381) (374) (247) (183) (394) (197) (842) (291) Accretion of effective interest 580 402 391 361 308 310 271 278 Amortization of other property and equipment 18 21 17 17 17 20 33 23 Unit-based compensation expenses 133 247 19 (95) (9) 159 184 237 Provision for non-recoverable capital expenditures (1) (688) (654) (650) (644) (653) (639) (626) (634) Provision for unrecovered rental fees (1) (375) (375) (375) (375) (375) (375) (375) (375) AFFO (1) 9,167 8,923 8,581 7,964 7,618 8,929 7,629 9,433 Transaction costs on disposition of investment properties and mortgage early repayment fees - - - 267 201 37 46 - AFFO Adjusted (1) 9,167 8,923 8,581 8,231 7,819 8,966 7,675 9,433 AFFO per unit (1) (2) (3) 10.3¢ 10.1¢ 9.7¢ 9.1¢ 8.7¢ 10.2¢ 8.8¢ 10.9¢ AFFO Adjusted per unit (1) (2) (4) 10.3¢ 10.1¢ 9.7¢ 9.4¢ 8.9¢ 10.3¢ 8.8¢ 10.9¢ AFFO payout ratio (1) 72.7 % 74.5 % 76.8 % 82.9 % 86.2 % 72.9 % 85.8 % 69.0 % AFFO Adjusted payout ratio (1) 72.7 % 74.5 % 77.2 % 80.2 % 83.9 % 72.6 % 85.3 % 69.0 % (1) This is a non-IFRS financial measure, refer to appendix 1. (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). _______________________________________________ 1 This is a non-IFRS financial measure, refer to page 5 and 6. Debt Ratios The following table summarizes the Trust's debt ratios as at March 31, 2025, and 2024 and December 31, 2024: (in thousands of dollars) March 31, 2025 December 31, 2024 March 31, 2024 $ $ $ Cash and cash equivalents (5,450) (2,471) (1,781) Mortgage loans outstanding (1) 661,874 665,607 630,513 Convertible debentures (1) 36,671 19,576 43,277 Credit facilities 34,276 44,298 44,797 Total long-term debt less cash and cash equivalents (2) (3) 727,371 727,010 716,806 Total gross value of the assets of the Trust less cash and cash equivalents (2) (4) 1,260,313 1,254,818 1,228,643 Mortgage debt ratio (excluding convertible debentures and credit facilities) (2) (5) 52.1 % 52.8 % 51.3 % Debt ratio – convertible debentures (2) (6) 2.9 % 1.6 % 3.5 % Debt ratio – credit facilities (2) (7) 2.7 % 3.5 % 3.6 % Total debt ratio (2) 57.7 % 57.9 % 58.3 % (1) Before unamortized financing expenses and fair value assumption adjustments. (2) This is a non-IFRS financial measure, refer to appendix 1 (3) Long-term debt less free cash flow is a non-IFRS financial measure, calculated as total of: (i) fixed rate mortgage loans payable; (ii) floating rate mortgage loans payable; (iii) Series I debenture capital adjusted with non-derivative component less conversion options exercised by holders; and (iv) 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 GVALC. (7) Debt ratio – credit facilities is calculated by dividing the credit facilities by the GVALC. SOURCE BTB Real Estate Investment Trust
