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RioCan's 2021 Results Reflect Quality of Portfolio and Tenants

GlobeNewswire Inc.
  • Net income of $598.4 million and FFO per unit 1 of $1.60

  • Distribution increase of 6.25% to $1.02 per unit annually effective February 2022

TORONTO, Feb. 09, 2022 (GLOBE NEWSWIRE) -- RioCan Real Estate Investment Trust (“RioCan" or the "Trust”) announced today its financial results for the three months and year ended December 31, 2021 (the "Fourth Quarter").

"In 2021, RioCan delivered strong results demonstrating once again the quality of our portfolio, the resilience of our tenants and the talent of our people. The critical nature of our centres has been emphasized through the merger of physical and online retail. Tenants continued to seize the opportunity to lease our well-located space and our development pipeline remained on track to deliver new and dynamic space," said Jonathan Gitlin, President and CEO of RioCan. "Having proven our ability to execute in the face of unprecedented challenges, we maintain our focus on our long-term strategy to maximize the value of our portfolio and grow our business. The distribution increase announced today is a clear indication of our confidence in our people, our assets and our strategy, which will deliver sustainable growth and robust returns for our Unitholders."

Three months ended
December 31

Years ended
December 31

(in millions, except where otherwise noted, and per unit values)

2021

2020

2021

2020

Financial Highlights

Net income (loss)

$

208.8

$

65.6

$

598.4

$

(64.8

)

Weighted average Units outstanding - diluted (in thousands)

315,733

317,739

317,284

317,725

FFO 1

$

146.5

$

124.1

$

507.0

$

507.4

FFO (excluding net debt prepayment costs and one-time compensation costs) 1

$

150.4

$

124.1

$

524.0

$

507.4

FFO per unit - diluted 1

$

0.46

$

0.39

$

1.60

$

1.60

FFO per unit (excluding net debt prepayment costs and one-time compensation costs) - diluted 1

$

0.48

$

0.39

$

1.65

$

1.60

FFO per Unit and Net Income

  • FFO per unit of $0.46 for the quarter was $0.07 per unit or 18% higher than the same period last year of which $0.02 per unit was driven by Same Property NOI1 and $0.01 per unit contributed by NOI from completed properties under developments1. The remaining $0.04 per unit increase was due to higher residential inventory gains of $22.8 million, mainly from selling a 75% interest in the condominium component of Leaside Centre mixed-use project in Toronto, partially offset by a reduction in NOI from properties sold1 of $5.1 million, lower lease cancellation fees of $4.8 million and debt prepayment costs of $3.9 million.

  • FFO per unit for the year was $1.60, unchanged from the prior year, and included increases of $0.06 per unit driven by Same Property NOI and $0.02 per unit of NOI from completed development projects. This was partially offset by a reduction in NOI from commercial properties sold of $0.03 per unit, debt prepayment costs of $0.03 per unit and one-time compensation costs of $0.02 per unit. The $12.9 million increase in residential inventory gains in the year was mostly offset by $11.1 million lower realized gains on the sale of marketable securities and dividend income.

  • Net income for the year and Fourth Quarter was $598.4 million and $208.8 million and exceeded the comparable periods last year by $663.2 million and $143.2 million, respectively, mainly due to fair value gains of $124.1 million and $72.3 million recognized in 2021, compared to fair value losses of $526.8 million and $42.3 million in 2020.

1. A non-GAAP measurement. For definitions, reconciliations and the basis of presentation of RioCan's non-GAAP measures, refer to the Basis of Presentation and Non-GAAP Measures section in this News Release.

Distributions

  • RioCan's Board of Trustees has approved an increase to the monthly distributions to Unitholders of 6.25% to $0.085 cents per unit commencing with the February 2022 distribution, payable on March 7, 2022 to Unitholders of record as at February 28, 2022. This increase brings RioCan's annualized distribution to $1.02 per unit. The Trust's objectives include providing sustainable distribution increases supported by FFO per unit growth while maintaining a FFO Payout Ratio1 of approximately 55% to 65% over the long-term. This enables us to provide a growing income stream to our Unitholders while retaining the cash flow required to fund future growth. With a FFO per unit growth target of 5% to 7% for 2022, the Trust expects to achieve its payout ratio objective.

Progress at The Well

  • Solid progress continued on The Well™, with the construction of the commercial component, which includes office and retail, at approximately 82% complete, excluding fixturing. Retail leasing has gained momentum and, as of February 9, 2022, approximately 50% of the retail space has firm leases with that number increasing to 62% when including leases in advanced discussions with tenants. Grand opening of the retail component is expected in the spring of 2023. As of February 9, 2022, 90% of the office component of the space is leased and 638,000 square feet was handed over to tenants for fixturing with first cash rents to start in the second half of 2022. The purpose-built residential rental building, FourFifty The Well™, is also advancing as planned and is expected to be complete in 2023.

Capital Recycling

  • In 2021, the Trust completed $848.6 million of dispositions at a weighted average capitalization rate of 3.75%, a testament to the quality and demand for the Trust's assets.

  • As of February 9, 2022, the Trust has firm or conditional deals that were in-place at or entered into after year end and deals that closed subsequent to year end to sell full or partial interests in a number of properties totaling $98.0 million.

Capital Management Update

  • In 2021, the Trust advanced it's objectives to have 70% of total debt unsecured and to extend the weighted average term to maturity of its total debt portfolio.

  • On November 8, 2021, RioCan issued $450.0 million, 2.829% of Series AE senior unsecured green bond debentures with a seven-year term.

  • On November 30, 2021, RioCan redeemed, in full, its $250.0 million, 3.746% Series V unsecured debentures due May 30, 2022 in accordance with their terms, at a total redemption price of $253.8 million.

  • The Trust also prepaid $344.5 million of mortgages and unwound the associated interest rate swap hedges for a net prepayment cost of $0.1 million. An additional $41.0 million mortgage was repaid on the disposition of Kennedy Commons. In total, $385.5 million of mortgages were repaid in the quarter.

  • On December 14, 2021, the Trust entered into $300.0 million of bond forward contracts maturing on September 15, 2022 and subsequent to year end, entered into an additional $200.0 million of bond forwards maturing on April 28, 2022. These bond forward contracts are a hedge of the Trust's exposure to movements in underlying risk-free interest rates associated with the anticipated refinancing of the $300.0 million Series Y debentures maturing on October 3, 2022 and future anticipated financings, respectively.

  • During the Fourth Quarter, the Trust acquired and cancelled 7,973,045 units at a weighted average purchase price of $22.32 per unit, for a total cost of $178.1 million.

  • To provide additional financial liquidity, subsequent to year end on February 2, 2022, the Trust increased the credit limit on its revolving unsecured operating line of credit by $250.0 million to $1.3 billion.

1. A non-GAAP measurement. For definitions, reconciliations and the basis of presentation of RioCan's non-GAAP measures, refer to the Basis of Presentation and Non-GAAP Measures section in this News Release.

Operation Highlights

Three months ended
December 31

Years ended
December 31

2021

2020

2021

2020

Operation Highlights (i)

Occupancy - committed (ii)

96.8

%

95.7

%

96.8

%

95.7

%

Blended leasing spread

4.6

%

3.8

%

6.3

%

5.0

%

New leasing spread

3.8

%

5.1

%

8.6

%

7.9

%

Renewal leasing spread

5.0

%

3.6

%

5.4

%

4.4

%

Rent collection (iii)

98.6

%

96.2

%

98.0

%

94.4

%


(i)

Includes commercial overall portfolio only.

(ii)

Information presented as at respective periods then ended.

(iii)

Represents percentage of total billed gross rents for the Fourth Quarter and three quarters of 2020 which has been collected in cash as of February 9, 2022. Year ended December 31, 2020 includes billed gross rents for the period from April 1, 2020 to December 31, 2020.

  • Same Property NOI grew by 4.9% in Q4 2021 when compared to the same period last year. Same Property NOI excluding the pandemic-related provision1 was positive at 1.0%. RioCan collected 98.6% of billed gross rents for Q4 2021, which resulted in the pandemic-related provision falling from $9.0 million in Q4 2020 to $2.9 million in the Fourth Quarter. Same Property NOI for full year 2021 grew by 3.4% despite the one quarter of pre-pandemic results included in 2020. The pandemic-related provision for the year fell from $42.5 million in 2020 to $17.2 million in 2021 despite the significant impact lockdowns had on our tenants throughout the year.

  • Committed occupancy for the total portfolio of 96.8% showed solid improvement, increasing by 40 basis points when compared to Q3 2021. Retail committed occupancy ended the year at 97.2% and in the Greater Toronto Area jumped by 80 bps in Q4 2021, fuelling a 50 basis point increase in total portfolio retail committed occupancy. Committed occupancy for the total portfolio climbed steadily throughout 2021 from strong demand for our prime locations resulting in a 110 basis point year-over-year increase.

  • New and renewed leases totalled 4.7 million square feet (at 100% ownership interest) for the year at a blended leasing spread of 6.3%. New leasing of 1.7 million square feet exceeded pre-pandemic levels at new leasing spreads for the overall portfolio of 8.6%. Renewed leases of 3.0 million square feet were completed at renewal leasing spreads of 5.4%, for the overall portfolio.

1. A non-GAAP measurement. For definitions, reconciliations and the basis of presentation of RioCan's non-GAAP measures, refer to the Basis of Presentation and Non-GAAP Measures section in this News Release.

RioCan Living Update

Residential Rental Buildings in Operation

Number of
total units

Date of
lease launch

% of leased units
as of
February 9, 2022

% of leased units
as of
November 9, 2021

Stabilized (i)

eCentral (Yonge Eglinton Northeast Corner, Toronto)

466

December 2018

95.9

%

92.5

%

Frontier (Ottawa)

228

May 2019

95.6

%

97.4

%

Brio (Brentwood Village, Calgary)

163

April 2020

93.8

%

97.5

%

Market (Montreal) (ii)

139

December 2020

97.1

%

n/a

In lease-up

Pivot (Yonge Sheppard Centre, Toronto)

361

October 2020

84.8

%

72.0

%

Litho. (Toronto)

210

July 2021

61.9

%

37.1

%

Latitude (Ottawa)

209

July 2021

27.4

%

16.8

%

Strada (Toronto)

61

November 2021

27.9

%

%

Condominium Projects in Pre-construction (iii)

Number of
total units

Date of
sales launch

% of pre-sold units
released as of
February 9, 2022

% of pre-sold units
released as of
November 9, 2021

U.C. Towns 2, Oshawa, ON

65

August 2021

100.0

%

100.0

%

U.C. Tower 2, Oshawa, ON (iv)

993

August 2021

89.6

%

78.4

%

Queen & Ashbridge, Toronto, ON

399

September 2020

95.4

%

95.1

%

Verge (Phase One), Toronto, ON (iv)

197

July 2021

97.3

%

96.0

%

Verge (Phase Two), Toronto, ON (iv)

335

October 2021

94.6

%

88.4

%


(i)

A property is considered to have reached stabilization the earlier of (i) achieving 95% occupancy or (ii) 24 months after first occupancy.

(ii)

Market Phase One was acquired on February 8, 2022.

(iii)

Excludes a total of 1,194 condominium units under construction at the 11 YV, U.C. Uptowns and U.C. Tower projects and 48 units in interim occupancy at U.C. Uptowns.

(iv)

For U.C. Tower 2 (Phase One), Verge (Phase One) and Verge (Phase Two) only 606, 184 and 276 of the number of total units have been released for sale, respectively. The second phase of U.C. Tower 2 is expected to be released for sale in April 2022.

  • As of February 9, 2022, the Trust's residential rental portfolio, overseen by RioCan Living™, is comprised of 1,698 purpose-built completed units (at 100% ownership interest) across seven buildings located in Toronto, Ottawa and Calgary. The portfolio includes the recent completion of two multi-unit properties, Latitude™, the 209-unit project in Ottawa and Strada™, the 61-unit project in Toronto. Occupancy at these two buildings commenced in Q1 2022. Leasing velocity in all new properties in the start-up leasing phase was strong. Litho™ is now at 61.9% leased, up 24.8% since last reported, and Strada, which launched in November of 2021, is already 27.9% leased.

  • On February 8, 2022, the Trust acquired a 90% interest in the first phase of Market, a new apartment complex in Montreal, for a purchase price of $46.8 million at a 4.06% capitalization rate. The building contains 139 income producing residential rental units. RioCan will also acquire a 90% interest in 297 units in two additional phases under construction upon stabilization at a 4.16% capitalization rate. Financing of the acquisitions will be a combination of asset level mortgages and existing liquidity.

  • During the Fourth Quarter, RioCan sold a 75% interest in the condominium component of RioCan Leaside Centre mixed-use project to a joint venture partner for sale proceeds of $54.4 million, representing approximately $145 per square foot of 0.4 million square feet of future density, and recognized $25.3 million of inventory gains. RioCan owns 100% of the remaining development including approximately 0.6 million square feet of multi-use residential and 0.2 million square feet of commercial space. RioCan Leaside Centre in Toronto will be transformed into a 1.2 million square foot mixed-use community with a light rail transit station situated on the site.

Development Highlights

Three months ended
December 31

Years ended
December 31

(in millions except square feet)

2021

2020

2021

2020

Development Highlights

Development Completions - sq. ft. in thousands

86.0

320.0

243.0

529.0

Development Spending1

$

93.8

$

141.4

$

427.5

$

493.4

Under Active Development - sq. ft. in thousands (i)(ii)

2,082.0

2,439.0

2,082.0

2,439.0


(i)

Information presented as at respective periods then ended and includes properties under development and residential inventory.

(ii)

For 2021, excludes a total of 1.5 million square feet of completed phases and air rights sold (2020 - 1.4 million square feet).

  • RioCan's in-house development team delivered 243,000 square feet of completions during 2021, including Litho., retail space at Windfields Farm in Oshawa, Lincoln Fields Shopping Centre in Ottawa and RioCan Shawnessy in Calgary. The total embedded development potential within the Trust's portfolio is 43.1 million square feet of which 21.0 million square feet are currently zoned or have submitted applications.

  • Our development pipeline includes 13.8 million square feet of permitted projects of which 2.1 million square feet is currently under development. Construction projects include The Well, as discussed earlier in this release, and two residential rental projects in Ottawa, Luma™ and Rhythm™, which are on schedule for completion by Q2 2022 and Q4 2022, respectively.

  • The Trust's Development Spending target for 2022 is estimated to be in the $475 million to $525 million range. In 2022, the Trust expects to deliver projects with cost of $675 million to $725 million, the largest amount of annual cost transfers since the inception of this development program.

Balance Sheet Strength

(in millions except percentages)
As at

December 31, 2021

December 31, 2020

Balance Sheet Strength Highlights

Total assets

$

15,177

$

15,268

Total debt

$

6,611

$

6,928

Liquidity (i) 1

$

1,010

$

1,577

Adjusted Debt to Adjusted EBITDA (i) 1

9.59x

9.47x

Total Adjusted Debt to Total Adjusted Assets (i) 1

43.9

%

45.0

%

Ratio of Unsecured Debt and Secured Debt (i) 1

59.4% / 40.6%

57.2% / 42.8%

Unencumbered Assets (i) 1

$

9,392

$

8,727

Unencumbered Assets to Unsecured Debt (i) 1

231

%

215

%


(i)

At RioCan's proportionate share.

  • The Trust ended 2021 with $1.0 billion of Liquidity in the form of cash and cash equivalents and undrawn lines of credit, increasing to $1.3 billion after accounting for the increase in the unsecured operating line of credit on February 2, 2022.

  • RioCan’s unencumbered asset pool was $9.4 billion, which generated 64.9% of Annual Normalized NOI1 and provided 2.31x coverage over Unsecured Debt. This pool increased from the prior year as the Trust proactively repaid mortgages.

  • The Trust's Total Adjusted Debt to Total Adjusted Assets at RioCan's proportionate share improved from December 31, 2020 mainly due to year-over-year decrease of $239.9 million in proportionate total debt balances at the current year end as the Trust has utilized proceeds from asset sales to reduce debt over the course of 2021.

  • Adjusted Debt to Adjusted EBITDA was 9.59x on a proportionate share basis, as at December 31, 2021. The increase in Adjusted Debt to Adjusted EBITDA from prior year end was primarily due to the net impact of higher average Total Adjusted Debt balances, as debt was used to fund development, partially offset by higher Adjusted EBITDA. This ratio has improved since Q3 2021 as Adjusted EBITDA has continued to improve.

1. A non-GAAP measurement. For definitions, reconciliations and the basis of presentation of RioCan's non-GAAP measures, refer to the Basis of Presentation and Non-GAAP Measures section in this News Release.

Conference Call and Webcast

Interested parties are invited to participate in a conference call with management on Thursday, February 10, 2022 at 10:00 a.m. (ET). Participants will be required to identify themselves and the organization on whose behalf they are participating.

In order to participate, please dial 647-427-3230 or 1-877-486-4304. For those unable to participate in the live mode, a replay will be available at 1-855-859-2056, passcode 5956476#.

For a copy of the slides to be used for the conference call or to access the simultaneous webcast, visit RioCan’s website at http://investor.riocan.com/investor-relations/events-and-presentations/ and click on the link for the webcast.

About RioCan

RioCan is one of Canada’s largest real estate investment trusts. RioCan owns, manages and develops retail-focused, increasingly mixed-use properties located in prime, high-density transit-oriented areas where Canadians want to shop, live and work. As at December 31, 2021, our portfolio is comprised of 207 properties with an aggregate net leasable area of approximately 36.4 million square feet (at RioCan's interest) including office, residential rental and 13 development properties. To learn more about us, please visit www.riocan.com.

Basis of Presentation and Non-GAAP Measures

All figures included in this News Release are expressed in Canadian dollars unless otherwise noted. RioCan’s annual audited consolidated financial statements ("2021 Annual Consolidated Financial Statements") are prepared in accordance with International Financial Reporting Standards (IFRS). Financial information included within this News Release does not contain all disclosures required by IFRS, and accordingly should be read in conjunction with the Trust's 2021 Annual Consolidated Financial Statements and MD&A for the three months and year ended December 31, 2021, which is available on RioCan's website at www.riocan.com and on SEDAR at www.sedar.com.

Consistent with RioCan’s management framework, management uses certain financial measures to assess RioCan’s financial performance, which are not in accordance with generally accepted accounting principles (GAAP) under IFRS. Funds From Operations (“FFO”) and FFO (excluding net debt prepayment costs and one-time compensation costs), FFO per unit and FFO per unit (excluding net debt prepayment costs and one-time compensation costs), Net Operating Income ("NOI"), Same Property NOI, Development Spending, Total Contractual Debt, Liquidity, Adjusted Debt to Adjusted EBITDA, Total Adjusted Debt to Total Adjusted Assets, RioCan's Proportionate Share, Unsecured Debt, Secured Debt, Unencumbered Assets to Unsecured Debt and Percentage of Normalized NOI Generated from Unencumbered Assets, as well as other measures that may be discussed elsewhere in this News Release, do not have a standardized definition prescribed by IFRS and are, therefore, unlikely to be comparable to similar measures presented by other reporting issuers. RioCan supplements its IFRS measures with these Non-GAAP measures to aid in assessing the Trust’s underlying performance and reports these additional measures so that investors may do the same. Non-GAAP measures should not be considered as alternatives to net earnings or comparable metrics determined in accordance with IFRS as indicators of RioCan’s performance, liquidity, cash flow, and profitability. For full definitions of these measures, please refer to the "Non-GAAP Measures” section in RioCan’s MD&A for the three months and year ended December 31, 2021.

The reconciliations for each non-GAAP measure included in this News Release are outlined as follows:

RioCan's Proportionate Share

The following table reconciles the consolidated balance sheet from IFRS to RioCan's proportionate share basis as at December 31, 2021 and 2020:

As at

December 31, 2021

December 31, 2020

(in thousands)

IFRS basis

Equity-
accounted
investments

RioCan's
proportionate
share

IFRS basis

Equity-
accounted
investments

RioCan's
proportionate
share

Assets

Investment properties

$

14,021,338

$

409,794

$

14,431,132

$

14,063,022

$

243,677

$

14,306,699

Equity-accounted investments

327,335

(327,335

)

209,676

(209,676

)

Mortgages and loans receivable

237,790

237,790

160,646

160,646

Residential inventory

217,043

121,291

338,334

214,181

82,331

296,512

Assets held for sale

47,240

47,240

198,094

198,094

Receivables and other assets

248,959

35,367

284,326

183,633

28,202

211,835

Cash and cash equivalents

77,758

9,113

86,871

238,456

2,203

240,659

Total assets

$

15,177,463

$

248,230

$

15,425,693

$

15,267,708

$

146,737

$

15,414,445

Liabilities

Debentures payable

$

2,990,692

$

$

2,990,692

$

3,340,278

$

$

3,340,278

Mortgages payable

2,334,016

166,368

2,500,384

2,797,066

108,337

2,905,403

Lines of credit and other bank loans

1,285,910

48,049

1,333,959

790,539

28,716

819,255

Accounts payable and other liabilities

655,501

33,813

689,314

604,852

9,684

614,536

Total liabilities

$

7,266,119

$

248,230

$

7,514,349

$

7,532,735

$

146,737

$

7,679,472

Equity

Unitholders’ equity

7,911,344

7,911,344

7,734,973

7,734,973

Total liabilities and equity

$

15,177,463

$

248,230

$

15,425,693

$

15,267,708

$

146,737

$

15,414,445


The following tables reconcile the consolidated statements of income (loss) from IFRS to RioCan's proportionate share basis for the three months and years ended December 31, 2021 and 2020:

Three months ended December 31, 2021

Three months ended December 31, 2020

(in thousands)

IFRS basis

Equity-
accounted
investments

RioCan's
proportionate
share

IFRS basis

Equity-
accounted
investments

RioCan's
proportionate
share

Revenue

Rental revenue

$

266,899

$

7,071

$

273,970

$

276,422

$

4,300

$

280,722

Residential inventory sales

65,620

965

66,585

4,712

831

5,543

Property management and other service fees

3,920

3,920

4,050

4,050

336,439

8,036

344,475

285,184

5,131

290,315

Operating costs

Rental operating costs

Recoverable under tenant leases

93,346

588

93,934

95,452

400

95,852

Non-recoverable costs

9,019

609

9,628

14,995

331

15,326

Residential inventory cost of sales

39,286

289

39,575

1,143

270

1,413

141,651

1,486

143,137

111,590

1,001

112,591

Operating income

194,788

6,550

201,338

173,594

4,130

177,724

Other income (loss)

Interest income

3,842

566

4,408

3,500

347

3,847

Income from equity-accounted investments

6,503

(6,503

)

421

(421

)

Fair value gain (loss) on investment properties, net

72,255

1,480

73,735

(42,286

)

(2,852

)

(45,138

)

Investment and other income (loss)

(696

)

(144

)

(840

)

967

(19

)

948

81,904

(4,601

)

77,303

(37,398

)

(2,945

)

(40,343

)

Other expenses

Interest costs, net

42,403

1,819

44,222

44,841

1,173

46,014

General and administrative

11,924

16

11,940

12,941

10

12,951

Internal leasing costs

2,982

2,982

2,901

2,901

Transaction and other costs

6,779

114

6,893

1,510

2

1,512

Debt prepayment costs, net

3,896

3,896

67,984

1,949

69,933

62,193

1,185

63,378

Income before income taxes

$

208,708

$

$

208,708

$

74,003

$

$

74,003

Current income tax recovery

(68

)

(68

)

(711

)

(711

)

Deferred income tax expense

9,105

9,105

Net income

$

208,776

$

$

208,776

$

65,609

$

$

65,609


Year ended December 31, 2021

Year ended December 31, 2020

(in thousands)

IFRS basis

Equity-
accounted
investments

RioCan's
proportionate
share

IFRS basis

Equity-
accounted
investments

RioCan's
proportionate
share

Revenue

Rental revenue

$

1,066,562

$

26,836

$

1,093,398

$

1,090,732

$

17,162

$

1,107,894

Residential inventory sales

93,727

6,474

100,201

36,347

6,718

43,065

Property management and other service fees

14,772

14,772

16,584

16,584

1,175,061

33,310

1,208,371

1,143,663

23,880

1,167,543

Operating costs

Rental operating costs

Recoverable under tenant leases

367,297

2,089

369,386

377,787

1,495

379,282

Non-recoverable costs

40,753

2,544

43,297

64,751

1,599

66,350

Residential inventory cost of sales

65,346

2,371

67,717

20,842

3,567

24,409

473,396

7,004

480,400

463,380

6,661

470,041

Operating income

701,665

26,306

727,971

680,283

17,219

697,502

Other income (loss)

Interest income

13,666

2,160

15,826

14,602

1,383

15,985

Income from equity-accounted investments

19,189

(19,189

)

3,985

(3,985

)

Fair value gain (loss) on investment properties, net

124,052

(1,113

)

122,939

(526,775

)

(9,613

)

(536,388

)

Investment and other income (loss)

2,743

(806

)

1,937

8,216

(166

)

8,050

159,650

(18,948

)

140,702

(499,972

)

(12,381

)

(512,353

)

Other expenses

Interest costs, net

171,521

7,026

178,547

180,811

4,788

185,599

General and administrative

51,400

60

51,460

40,524

42

40,566

Internal leasing costs

11,807

11,807

10,192

10,192

Transaction and other costs

17,343

272

17,615

2,934

8

2,942

Debt prepayment costs, net

10,914

10,914

262,985

7,358

270,343

234,461

4,838

239,299

Income (loss) before income taxes

$

598,330

$

$

598,330

$

(54,150

)

$

$

(54,150

)

Current income tax recovery

(59

)

(59

)

(275

)

(275

)

Deferred income tax expense

10,905

10,905

Net income (loss)

$

598,389

$

$

598,389

$

(64,780

)

$

$

(64,780

)

NOI and Same Property NOI

The following table reconciles operating income to NOI and Same Property NOI to NOI for the three months and years ended December 31, 2021 and 2020:

Three months ended
December 31

Years ended
December 31

(thousands of dollars)

2021

2020

2021

2020

Operating Income

$

194,788

$

173,594

$

701,665

$

680,283