Presentation to CBFI Holders
Presentation to CBFI Holders April 19, 2017 Ordinary and Extraordinary Meeting
Agenda Ordinary Meeting I. Approval of the Audited Annual Financial Statements for 2016 II. Approval of the 2016 Annual Report III. Ratification of the Technical Committee’s members
Extraordinary Meeting IV. Approval of the option to publicly place CBFIs through a CBFI repurchase program pursuant to applicable legislation
2
I. 2016 Financial Statements
I. Presentation, discussion, and approval of the Audited Annual Financial Statements for fiscal year 2016
3
I. Estados Financieros 2016
4
I. Estados Financieros 2016
5
I. Estados Financieros 2016
6
I. Estados Financieros 2016
7
II. 2016 Annual Report
II.
Presentation, discussion, and approval for the Annual Report as of December 31, 2016
8
II. Operational Highlights Operational Highlights •
Occupancy rate as of December 31, 2016 was 94.8%, a 160 basis point increase with the fourth quarter of 2015 (4Q15).
•
The average leasing rate for the portfolio at year-end was US$4.88.
•
At year-end, Terrafina reported a total of 30.1 million square feet (msf) of Gross Leasable Area (GLA) comprised of 209 properties and 218 tenants.
•
2016 leasing activity totaled 6.7 msf, of which 31.1% corresponded to new leases, 24.1% to lease renewals, and 44.8% to early renewals. Leasing activity was mainly concentrated in the Ciudad Juarez, Cuautitlan Izcalli, Chihuahua, Ramos Arizpe, San Luis Potosi, Guadalajara, Tijuana, Monterrey, Apodaca, Saltillo and Toluca markets.
•
Total developments for 2016 included 620,000 square feet of GLA, which are expected to contribute US$3.1 million to Net Operating Income (NOI) for the 2017 period. The expected return rate for the developments is 10.5%*.
For more information on our Annual Report, please visit www.terrafina.mx *Expected return is not guaranteed. Final results may vary.
9
II. Financial Highlights Financial Highlights •
2016 rental revenues reached US$131.7 million, of which US$33.4 million were generated during 4Q16; a 4.9% or US$1.9 million increase compared to 4Q15.
•
FY2016 NOI was US$131.8 million, of which US$33.1 million were generated during 4Q16; a 7.5% or US$2.3 million increase compared to 4Q15. The NOI margin reached 92.1% for FY2016 and 92.9% in 4Q16, a 180 basis point increase compared to 4Q15.
•
FY2016 EBITDA reached US$118.2 million, of which US$29.6 million were generated in 4Q16, an increase of 9.7% or US $2.6 million compared to 4Q15. The EBITDA margin for 2016 was 82.5% and 82.9% for 4Q16, a 306 basis point increase compared to 4Q15.
•
FY2016 adjusted funds for operations (AFFO) reached US$74.5 million, of which, US$20.4 million were generated in 4Q16, an increase of US$3.9 million compared to 4Q15. AFFO margin for 2016 was 52.7% and 56.8% for 4Q16, a 877 basis point increase compared to 4Q15.
•
FY2016 distributions totaled US$74.5 million. As a result of 4Q16 operations, distributions corresponding to the October 1 to December 31, 2016 period of Ps.0.6593 per CBFI (US$0.0335 per CBFI) were paid to our shareholders.
•
The result of distributions per CBFI for 2016 was a total of US$0.1227; considering the average share price of the year of US$1.62 (Ps.30.16), Terrafina’s dividend yield for the year was 7.6%.
For more information on our Annual Report, please visit www.terrafina.mx *Expected return is not guaranteed. Final results may vary.
10
III. Technical Committee Members III. The Technical Committee recommends ratifying the existing Technical Committee Members. Technical Committee Member
Independent
Alberto Chretin Castillo
No
Alfonso Munk Alba
No
Eduardo Solís Sánchez
Yes
Arturo D’Acosta Ruiz
Yes
Jose Luis Barraza Gonzalez
Yes
Victor David Almeida Garcia
Yes
Carmina Abad Sánchez
Yes
Technical Committee Member appointed by Afore Banamex1 Julio Ignacio Cardenas Sarre
Independent Yes
1) As per Terrafina’s Trust Agreement, any shareholder with 10% or more of the total outstanding CBFIs has the prerrogative of appointing one independent member to our Technical Committee.
11
III. Miembros del Comité Técnico
12
III. Miembros del Comité Técnico
13
III. Miembros del Comité Técnico
14
III. Miembros del Comité Técnico
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III. Miembros del Comité Técnico
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III. Miembros del Comité Técnico
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III. Miembros del Comité Técnico
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III. Miembros del Comité Técnico
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IV. CBFI Repurchase IV. Proposal, discussion, and approval of an amendment to the Trust Agreement in order to allow the repurchase of CBFIs for their subsequent public placement. •
A new legislation allows FIBRAs to repurchase of up to 5% of its outstanding shares.
•
Our Trust Agreement already provides for the company to repurchase CBFIs for their immediate cancelation, approval is sought in order to maintain such CBFIs and then placed publicly pursuant to current legislation.
20
Annex A – Trust Agreement Proposed Amendments to the Trust Agreement
21
Agenda Ordinary Meeting I. Approval of the Audited Annual Financial Statements for 2016 II. Approval of the 2016 Annual Report III. Ratification of the Technical Committee’s members
Extraordinary Meeting IV. Approval of the option to publicly place CBFIs through a CBFI repurchase program pursuant to applicable legislation
2
I. 2016 Financial Statements
I. Presentation, discussion, and approval of the Audited Annual Financial Statements for fiscal year 2016
3
I. Estados Financieros 2016
4
I. Estados Financieros 2016
5
I. Estados Financieros 2016
6
I. Estados Financieros 2016
7
II. 2016 Annual Report
II.
Presentation, discussion, and approval for the Annual Report as of December 31, 2016
8
II. Operational Highlights Operational Highlights •
Occupancy rate as of December 31, 2016 was 94.8%, a 160 basis point increase with the fourth quarter of 2015 (4Q15).
•
The average leasing rate for the portfolio at year-end was US$4.88.
•
At year-end, Terrafina reported a total of 30.1 million square feet (msf) of Gross Leasable Area (GLA) comprised of 209 properties and 218 tenants.
•
2016 leasing activity totaled 6.7 msf, of which 31.1% corresponded to new leases, 24.1% to lease renewals, and 44.8% to early renewals. Leasing activity was mainly concentrated in the Ciudad Juarez, Cuautitlan Izcalli, Chihuahua, Ramos Arizpe, San Luis Potosi, Guadalajara, Tijuana, Monterrey, Apodaca, Saltillo and Toluca markets.
•
Total developments for 2016 included 620,000 square feet of GLA, which are expected to contribute US$3.1 million to Net Operating Income (NOI) for the 2017 period. The expected return rate for the developments is 10.5%*.
For more information on our Annual Report, please visit www.terrafina.mx *Expected return is not guaranteed. Final results may vary.
9
II. Financial Highlights Financial Highlights •
2016 rental revenues reached US$131.7 million, of which US$33.4 million were generated during 4Q16; a 4.9% or US$1.9 million increase compared to 4Q15.
•
FY2016 NOI was US$131.8 million, of which US$33.1 million were generated during 4Q16; a 7.5% or US$2.3 million increase compared to 4Q15. The NOI margin reached 92.1% for FY2016 and 92.9% in 4Q16, a 180 basis point increase compared to 4Q15.
•
FY2016 EBITDA reached US$118.2 million, of which US$29.6 million were generated in 4Q16, an increase of 9.7% or US $2.6 million compared to 4Q15. The EBITDA margin for 2016 was 82.5% and 82.9% for 4Q16, a 306 basis point increase compared to 4Q15.
•
FY2016 adjusted funds for operations (AFFO) reached US$74.5 million, of which, US$20.4 million were generated in 4Q16, an increase of US$3.9 million compared to 4Q15. AFFO margin for 2016 was 52.7% and 56.8% for 4Q16, a 877 basis point increase compared to 4Q15.
•
FY2016 distributions totaled US$74.5 million. As a result of 4Q16 operations, distributions corresponding to the October 1 to December 31, 2016 period of Ps.0.6593 per CBFI (US$0.0335 per CBFI) were paid to our shareholders.
•
The result of distributions per CBFI for 2016 was a total of US$0.1227; considering the average share price of the year of US$1.62 (Ps.30.16), Terrafina’s dividend yield for the year was 7.6%.
For more information on our Annual Report, please visit www.terrafina.mx *Expected return is not guaranteed. Final results may vary.
10
III. Technical Committee Members III. The Technical Committee recommends ratifying the existing Technical Committee Members. Technical Committee Member
Independent
Alberto Chretin Castillo
No
Alfonso Munk Alba
No
Eduardo Solís Sánchez
Yes
Arturo D’Acosta Ruiz
Yes
Jose Luis Barraza Gonzalez
Yes
Victor David Almeida Garcia
Yes
Carmina Abad Sánchez
Yes
Technical Committee Member appointed by Afore Banamex1 Julio Ignacio Cardenas Sarre
Independent Yes
1) As per Terrafina’s Trust Agreement, any shareholder with 10% or more of the total outstanding CBFIs has the prerrogative of appointing one independent member to our Technical Committee.
11
III. Miembros del Comité Técnico
12
III. Miembros del Comité Técnico
13
III. Miembros del Comité Técnico
14
III. Miembros del Comité Técnico
15
III. Miembros del Comité Técnico
16
III. Miembros del Comité Técnico
17
III. Miembros del Comité Técnico
18
III. Miembros del Comité Técnico
19
IV. CBFI Repurchase IV. Proposal, discussion, and approval of an amendment to the Trust Agreement in order to allow the repurchase of CBFIs for their subsequent public placement. •
A new legislation allows FIBRAs to repurchase of up to 5% of its outstanding shares.
•
Our Trust Agreement already provides for the company to repurchase CBFIs for their immediate cancelation, approval is sought in order to maintain such CBFIs and then placed publicly pursuant to current legislation.
20
Annex A – Trust Agreement Proposed Amendments to the Trust Agreement
21
