CAPREIT Reports Continued Growth and Strong Operating Performance in First Quarter of 2018

| Source: Canadian Apartment Properties Real Estate Investment Trust


Canadian Apartment Properties Real Estate Investment Trust ("CAPREIT") (TSX:CAR.UN) announced today strong operating and financial results for the three months ended March 31, 2018.

For the Three Months Ended March 31,  2018  2017
Operating Revenues (000s)$168,019 $155,610
Net Rental Income ("NOI") (000s)$102,402 $91,598
NOI Margin 60.9%  58.9%
Normalized Funds From Operations ("NFFO") (000s)(1)$ 64,095 $ 57,937
NFFO Per Unit – Basic(1)$0.463 $0.429
Weighted Average Number of Units - Basic (000s) 138,554  135,076
NFFO Payout Ratio(1) 70.4%  74.5%

(1) These measures are not defined by IFRS, do not have standard meanings and may not be comparable with other industries or companies. Please refer to the cautionary statements under the heading "Non-IFRS Financial Measures" and the reconciliations provided in this press release.


  • Portfolio growth and strong operating performance generates 8.0% increase in revenues
  • Average monthly rents (“AMR”) up 4.2% for same residential properties
  • Portfolio occupancy remains strong at 98.6%
  • NOI rises 11.8% to $102.4 million with NOI margin of 60.9%, up from 58.9% for the same period last year
  • NFFO up 10.6% to $64.1 million
  • Continued accretive growth as NFFO per Unit up 7.9% despite a reduced leverage and an approximate 2.6% increase in the weighted average number of Units outstanding mainly due to the successful March 2018 equity offering
  • Continued strong organic growth as same property NOI up 7.0% due to increased revenues and proven property management programs
  • NFFO payout ratio strengthens to 70.4%
  • Closed and committed mortgage refinancings and new financings for $99.7 million, including $55.9 million for renewals of existing mortgages and $43.8 million for additional top up financing and new acquisition financing with a weighted average term to maturity of 9.8 years, and a weighted average interest rate of 3.33%
  • On May 8, 2018, CAPREIT announced a 3.9% increase in cash distributions to $1.33 per unit on an annualized basis as a result of continued strong operating results

“Following another year of record results in 2017, our strong operating performance continued in the first quarter of 2018”, commented David Ehrlich, President and CEO. “We are particularly pleased with the 7% increase in same property NOI as our successful sales and marketing strategies, combined with our proven property management program, continues to generate strong organic growth. We are confident this track record with continue going forward”.

For the Three Months Ended March 31,  2018  2017
Overall Portfolio Occupancy(1) 98.6%  98.6%
Overall Portfolio Average Monthly Rents(1),(2)$1,054 $1,007
Operating Revenues (000s)(4)$168,019 $155,610
Annualized Net Rental Revenue Run-Rate (000s)(1),(3)$643,769 $592,710
Operating Expenses (000s)$65,617 $64,012
NOI (000s)$102,402 $91,598
NOI Margin 60.9%  58.9%
Number of Suites and Sites Acquired -  32
Number of Suites Disposed -   31

(1) As at March 31.
(2)AMR is defined as actual rents, net of vacancies, divided by the total number of suites and sites in the portfolio and do not include revenues from parking, laundry or other sources.
(3)For a description of net rental revenue run-rate, see the Results of Operations section in the MD&A for the three months ended March 31, 2018.
(4)Contains ancillary income such as parking, laundry and antenna revenue.

Operating Revenues

For the three months ended March 31, 2018, total operating revenues increased by 8.0% compared to the same period last year, due to the contributions from acquisitions, increased same property AMR, and continuing high occupancies. For the three months ended March 31, 2018, ancillary revenues, including parking, laundry and antenna income, increased 4.7% to $8.6 million, compared to the same period last year.

CAPREIT’s annualized net rental revenue run-rate as at March 31, 2018 grew to $643.8 million, up 8.6% from $592.7 million as at March 31, 2017, primarily due to acquisitions completed within the last twelve months and strong increases in AMR on properties owned prior to March 31, 2017. Net rental revenue run-rate net of dispositions for the twelve months ended March 31, 2018 was $617.2 million (2017 – $572.6 million).

Portfolio Average Monthly Rents
  Total Portfolio Properties Owned Prior
to March 31, 2017

As at March 31, 2018  2017  2018  2017(1)
  AMR  Occ. % AMR  Occ. % AMR  Occ. % AMR  Occ. %
Average Residential Suites$1,15398.7$1,10598.6$1,15198.8$1,10598.6
Average MHC Land Lease Sites$39198.2$38198.4$39198.2$38198.4
Overall Portfolio Average$1,05498.6$1,00798.6$1,04898.7$1,00798.6

(1) Prior period comparable AMR and occupancy have been restated for properties disposed of since March 31, 2017.

Overall AMR for the stabilized residential suite portfolio (properties owned prior to March 31, 2017) increased 4.2% to $1,151 at March 31, 2018 from $1,105 at March 31, 2017. The increases were due primarily to a combination of ongoing successful sales and marketing strategies, above guideline rent increases, suite and building improvements, and continued strength in the residential rental sector in the majority of CAPREIT's regional markets. Occupancy for the stabilized residential suite portfolio increased to 98.8% as at March 31, 2018 compared to 98.6% for the same period last year.

For the total MHC land lease portfolio, AMR increased to $391 as at March 31, 2018, compared to $381 as at March 31, 2017 while occupancy remained strong at 98.2%. Management believes MHC land lease sites provide secure and stable cash flows due to long-term tenancies, high occupancies, steady increases in AMR, and significantly lower capital and maintenance costs.

For the Three Months Ended March 31,20182017
 Change in AMR% TurnoversChange in AMR% Turnovers
 $%& Renewals(1)$%& Renewals(1)
Suite Turnovers109.
Lease Renewals25.82.216.720.61.816.8
Weighted Average of Turnovers and Renewals42.53.7 25.62.3 

(1) Percentage of suites turned over or renewed during the period based on the total number of residential suites (excluding co-ownerships and the Netherland properties) held at the end of the period.

Overall, suite turnovers in the residential suite portfolio (excluding co-ownerships and The Netherlands properties) during the three months ended March 31, 2018 resulted in AMR increasing by approximately $109 or 9.6% compared to an increase of approximately $45 or 4.0% for the same period last year, primarily due to the strong rental markets of British Columbia and Ontario, offset by strategically reduced rents in the Alberta rental markets to increase occupancy and decrease in rents in Saskatchewan due to lower occupancy.

Pursuant to Management’s focus on increasing overall portfolio rents for the three months ended March 31, 2018, AMR on lease renewals increased by approximately $26 or 2.2%, compared to an increase of approximately $21 or 1.8% for the same period last year. Increased portfolio diversification helped mitigate geographical risk in particular areas of Canada. Management continues to pursue applications for annual guideline increases (“AGIs”) in Ontario, where it believes increases to raise AMR on lease renewals above the annual guideline are supported by market conditions. For 2018, the permitted guideline increases in Ontario and British Columbia have been set at 1.8% and 4.0% respectively, up from 1.5% and 3.7% last year.

Operating Expenses       
For the Three Months Ended March 31,   2018%(1) 2017%(1)
($ Thousands)       
Operating Expenses       
     Realty Taxes $17,33210.3$17,17611.0
     Utilities  18,65011.1 18,73012.0
     Other(2)  29,63517.6 28,10618.1
Total Operating Expenses $65,61739.0$64,01241.1

(1) As a percentage of total operating revenues.
(2)Comprises R&M, wages, general and administrative, insurance, advertising, and legal costs.

Operating Expenses

Overall operating expenses as a percentage of operating revenues improved to 39.0% from 41.1% for the same period last year due primarily to the increased size of the portfolio.


For the three months ended March 31, 2018, NOI increased by $10.8 million or 11.8%, and the NOI margin strengthened to 60.9% compared to 58.9% for the same period last year. For the three months ended March 31, 2018, operating revenues for stabilized suites and sites increased 3.9%, while operating expenses were lower by 0.4%, compared to the same period last year. As a result, for the three months ended March 31, 2018, stabilized NOI increased by 7.0% compared to the same period last year, showing the positive effects of CAPREIT’s geographic diversification across Canada and its proven property management programs.

For the Three Months Ended March 31,  2018  2017
NFFO (000s)$64,095 $57,937
NFFO Per Unit – Basic$ 0.463 $ 0.429
Cash Distributions Declared Per Unit$ 0.320 $ 0.315
NFFO Payout Ratio 70.4%  74.5%
NFFO Effective Payout Ratio 50.3%  50.1%

For the three months ended March 31, 2018, basic NFFO per Unit increased 7.9% compared to the same period last year despite the approximate 2.6% increase in the weighted average number of Units outstanding, due primarily to strong organic NOI growth and contributions from acquisitions.


As at March 31, 20182017
Total Debt to Gross Book Value 41.48% 43.99%
Total Debt to Gross Historical Cost(1) 53.77% 54.51%
Total Debt to Total Capitalization 42.00% 43.73%
Debt Service Coverage Ratio (times)(2) 1.64 1.63
Interest Coverage Ratio (times)(2) 3.22 3.12
Weighted Average Mortgage Interest Rate(3) 3.07% 3.20%
Weighted Average Mortgage Term to Maturity (years) 5.45 5.90

(1) Based on the historical cost of investment properties.
(2)Based on the trailing four quarters ended March 31, 2018.
(3)Weighted average mortgage interest rate includes deferred financing costs and fair value adjustments on an effective interest basis. Including the amortization of the realized component of the loss on settlement of $32.5 million included in AOCL, the effective portfolio weighted average interest rate at March 31, 2018 would be 3.17% (March 31, 2017 - 3.3%).

Financial Strength

Management believes CAPREIT’s strong balance sheet and liquidity position will enable it to continue to take advantage of acquisition and property capital investment opportunities over the long term.

CAPREIT is achieving its financing goals as demonstrated by the following key indicators:

  • Total debt to gross book value ratio strengthened to 41.48% as at March 31, 2018 compared to 43.99% for the same period last year;
  • Debt service and interest coverage ratio improved to 1.64 times and 3.22 times, respectively, compared to 1.63 times and 3.12 times for the same period last year;
  • As at March 31, 2018, 97.3% (March 31, 2017 – 95.9%) of CAPREIT’s mortgage portfolio was insured by the Canada Mortgage and Housing Corporation (“CMHC”), excluding the mortgages on CAPREIT’s MHC land lease sites and Euro LIBOR borrowings, resulting in improved spreads on mortgages and lower overall interest costs than conventional mortgages.
  • The effective portfolio weighted average interest rate on mortgages has steadily declined to 3.07% as at March 31, 2018 from 3.20% as at March 31, 2017, resulting in significant potential interest rate savings in future years;
  • Management expects to raise between $175 million and $225 million in total mortgage renewals and refinancings for 2018 excluding financings on acquisitions;
  • The weighted average term to maturity of the mortgage portfolio was 5.45 years as at March 31, 2018 compared to 5.90 years at March 31, 2017;
  • As at March 31, 2018, CAPREIT has investment properties with a fair value of $306.3 million not encumbered by mortgages and securing only the Acquisition and Operating Facility. CAPREIT intends to maintain unencumbered investment properties with an aggregate fair value in the range of $150 and $180 million over the long term.

Property Capital Investments

During the three months ended March 31, 2018, CAPREIT made property capital investments (excluding head office assets) of $28.2 million, compared to $30.8 million for the same period last year. In 2018, CAPREIT expects to complete property capital investments (excluding development and intensification) of approximately $185 million to $195 million.

Property capital investments include suite improvements, common areas and equipment, which generally tend to increase NOI more quickly. CAPREIT continues to invest in environment-friendly and energy-saving initiatives, including high-efficiency boilers, energy-efficient lighting systems and water saving programs, which have permitted CAPREIT to mitigate potential increases in utility and R&M costs and have improved overall portfolio NOI significantly.

Subsequent Event

On April 24, 2018, CAPREIT completed the acquisition of a property comprising of 134 MHC sites located in Swift Current, Saskatchewan. The purchase price of $5.65 million was financed with CAPREIT’s Acquisition and Operating credit facility.

On May 8, 2018, CAPREIT announced that its Board of Trustees had approved a 3.9% increase in monthly cash distributions to $0.1108 per Unit, or $1.33 per Unit on an annualized basis. The increase is effective with the May 2018 distribution payable on June 15, 2018 to Unitholders of record as at May 31, 2018.

Additional Information

More detailed information and analysis is included in CAPREIT's unaudited condensed consolidated interim financial statements and MD&A for the three months ended March 31, 2018, which have been filed on SEDAR and can be viewed at under CAPREIT’s profile or on CAPREIT’s website on the investor relations page at or

Conference Call

A conference call hosted by David Ehrlich, President and CEO and the CAPREIT Management Team, will be held Wednesday, May 9, 2018 at 10:00 am EST. The telephone numbers for the conference call are: Local/International: (416) 340-2216, North American Toll Free: (866) 225-0198.

A slide presentation to accompany Management's comments during the conference call will be available one hour and a half prior to the conference call. To view the slides, access the CAPREIT website at or, click on "Investor Relations" and follow the link at the top of the page. Please log on at least 15 minutes before the call commences.

The telephone numbers to listen to the call after it is completed (Instant Replay) are local/international (905) 694-9451 or North American toll free (800) 408-3053. The Passcode for the Instant Replay is 3265784#. The Instant Replay will be available until midnight, June 8, 2018. The call and accompanying slides will also be archived on the CAPREIT website at or For more information about CAPREIT, its business and its investment highlights, please refer to our website at or


CAPREIT owns interests in multi-unit residential rental properties, including apartments, townhomes and manufactured home communities (“MHC”) primarily located in and near major urban centres across Canada. As at March 31, 2018, CAPREIT had owning interests in 50,630 residential units, comprised of 44,174 residential suites and 31 MHC, comprising 6,456 land lease sites. For more information about CAPREIT, its business and its investment highlights, please refer to our website at or and our public disclosure which can be found under our profile at

Non-IFRS Financial Measures

CAPREIT prepares and releases unaudited consolidated interim financial statements and audited consolidated annual financial statements prepared in accordance with International Financial Reporting Standards (“IFRS”). In this and other earnings releases and investor conference calls, as a complement to results provided in accordance with IFRS, CAPREIT also discloses and discusses certain financial measures not recognized under IFRS and that do not have standard meanings prescribed by IFRS. These include stabilized net rental income (“Stabilized NOI”), Funds From Operations (“FFO”), Normalized Funds From Operations (“NFFO”), Adjusted Cash Flow from Operations (“ACFO”), FFO and NFFO per Unit amounts and FFO, NFFO and ACFO payout ratios, and Adjusted Cash Generated from Operating Activities (collectively, the “Non-IFRS Measures”). These Non-IFRS Measures are further defined and discussed in the MD&A released on May 8, 2018, which should be read in conjunction with this press release. Since these measures are not recognized under IFRS, they may not be comparable to similarly titled measures reported by other issuers. CAPREIT has presented the Non-IFRS measures because Management believes these Non-IFRS measures are relevant measures of the ability of CAPREIT to earn revenue and to evaluate CAPREIT’s performance and cash flows. A reconciliation of these Non-IFRS measures to the comparable IFRS measures, along with further definitions and discussion, is included in this press release. The Non-IFRS measures should not be construed as alternatives to net income (loss) or cash flows from operating activities determined in accordance with IFRS as indicators of CAPREIT’s performance or sustainability of our distributions.

Cautionary Statements Regarding Forward-Looking Statements

Certain statements contained, or contained in documents incorporated by reference, in this press release constitute forward-looking information within the meaning of securities laws. Forward-looking information may relate to CAPREIT’s future outlook and anticipated events or results and may include statements regarding the future financial position, business strategy, budgets, litigation, projected costs, capital investments, financial results, taxes, plans and objectives of or involving CAPREIT. Particularly, statements regarding CAPREIT’s future results, performance, achievements, prospects, costs, opportunities and financial outlook, including those relating to acquisition and capital investment strategy and the real estate industry generally, are forward-looking statements. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “plan”, “anticipate”, “believe”, “intend”, “estimate”, “predict”, “potential”, “continue” or the negative thereof, or other similar expressions concerning matters that are not historical facts. Forward-looking statements are based on certain factors and assumptions regarding expected growth, results of operations, performance and business prospects and opportunities. In addition, certain specific assumptions were made in preparing forward-looking information, including: that the Canadian, Irish and Dutch economies will generally experience growth, however, may be adversely impacted by the global economy; that inflation will remain low; that interest rates will remain low in the medium term; that Canada Mortgage and Housing Corporation (“CMHC”) mortgage insurance will continue to be available and that a sufficient number of lenders will participate in the CMHC-insured mortgage program to ensure competitive rates; that the Canadian capital markets will continue to provide CAPREIT with access to equity and/or debt at reasonable rates; that vacancy rates for CAPREIT properties will be consistent with historical norms; that rental rates will grow at levels similar to the rate of inflation on renewal; that rental rates on turnovers will remain stable; that CAPREIT will effectively manage price pressures relating to its energy usage; and, with respect to CAPREIT’s financial outlook regarding capital investments, assumptions respecting projected costs of construction and materials, availability of trades, the cost and availability of financing, CAPREIT’s investment priorities, the properties in which investments will be made, the composition of the property portfolio and the projected return on investment in respect of specific capital investments. Although the forward-looking statements contained in this press release are based on assumptions, Management believes they are reasonable as of the date hereof; however there can be no assurance actual results will be consistent with these forward-looking statements, and they may prove to be incorrect. Forward-looking statements necessarily involve known and unknown risks and uncertainties, many of which are beyond CAPREIT’s control, that may cause CAPREIT or the industry’s actual results, performance, achievements, prospects and opportunities in future periods to differ materially from those expressed or implied by such forward-looking statements. These risks and uncertainties include, among other things, risks related to: reporting investment properties at fair value, real property ownership, leasehold interests, investment restrictions, operating risk, energy costs, environmental matters, catastrophic events, insurance, capital investments, indebtedness, foreign operation and currency risks, taxation, including land transfer tax and foreign tax, government regulations, controls over financial accounting, legal and regulatory concerns, the nature of units of CAPREIT (“Trust Units”), and units of CAPREIT’s subsidiary, CAPREIT Limited Partnership (“Exchangeable Units”) (collectively, the “Units”), unitholder liability, liquidity and price fluctuation of Units, dilution, distributions, participation in CAPREIT’s distribution reinvestment plan, potential conflicts of interest, dependence on key personnel, general economic conditions, competition for residents, competition for real property investments, continued growth and risks related to acquisitions, development and cybersecurity.  There can be no assurance the expectations of CAPREIT’s Management will prove to be correct. These risks and uncertainties are more fully described in regulatory filings, including CAPREIT’s Annual Information Form, which can be obtained on SEDAR at, under CAPREIT’s profile, as well as under Risks and Uncertainties section of the MD&A released on May 8, 2018. The information in this press release is based on information available to Management as of May 8, 2018. Subject to applicable law, CAPREIT does not undertake any obligation to publicly update or revise any forward-looking information.
SOURCE: Canadian Apartment Properties Real Estate Investment Trust

Mr. Michael Stein
Chairman (416) 861-5788 
Mr. David Ehrlich
President & CEO(416) 861-9404
Mr. Scott Cryer
Chief Financial Officer(416) 861-5771



Condensed Consolidated Balance Sheets

As at March 31, 2018December 31, 2017
 ($ Thousands)    
Investment properties   $                   9,007,211   $                   8,886,556
Total Assets 9,323,656 9,187,170
Mortgages payable 3,569,937 3,581,501
Bank indebtedness 323,338 446,895
Total Liabilities 4,126,605 4,263,764
Unitholders' Equity 5,197,051 4,923,406

Condensed Consolidated Income Statements

For the Three Months Ended March 31,   2018  2017 
($ Thousands)     
NOI  102,402  91,598 
Trust expenses  (10,140) (6,438)
Unrealized Gain on Remeasurement of Investment     
  properties  61,235  91,511 
Realized loss on disposition of investment     
 properties  -  (80)
Remeasurement of Exchangeable Units  22  (311)
Unit-based compensation expenses  (2,786) (7,120)
Interest on mortgages payable and other financing     
costs  (28,965) (29,153)
Interest on bank indebtedness and other financing  (3,823) (750)
Interest on Exchangeable Units  (42) (51)
Other income  3,439  3,041 
Amortization  (1,273) (964)
(Loss) gain on derivative financial instruments  (6,037) 186 
Fair value adjustments on Investments  (739) - 
Foreign currency translation  (9,928) (359)
Net Income Before Income Taxes  103,365  141,110 
Current and Deferred Income Tax (expense)
  (3,167) 23 
Net Income  100,198  141,133 
Other Comprehensive Income $21,979 $3,044 
Comprehensive Income $122,177 $144,177 

Condensed Consolidated Statements of Cash Flows

For the Three Months Ended, March 31,  2018  2017 
($ Thousands)     
Cash Provided By Operating Activities:     
Net Income $100,198 $141,133 
Items in Net Income Not Affecting Cash:     
Changes in Non-cash Operating Assets and     
  Liabilities  (12,212) (22,562)
Realized and Unrealized Gain on     
  Remeasurements  (55,220) (91,306)
FV of adjustments - Investments  739  - 
Unit-based Compensation Expenses  2,786  7,120 
Items Related to Financing and Investing     
  Activities  30,092  23,362 
Deferred income tax expense  3,167  - 
Other  12,053  1,967 
Cash Provided By Operating Activities  81,603  59,714 
Cash Used In Investing Activities     
Acquisitions  (3,837) (7,699)
Capital Investments  (31,483) (36,281)
Dispositions  -  575 
Other  240  3,969 
Cash Used In Investing Activities  (35,080) (39,436)
Cash Used By Financing Activities     
Mortgages, Net of Financing Costs  (28,712) (14,803)
Bank Indebtedness  (133,485) 50,063 
Interest Paid  (28,766) (27,370)
Proceeds on Issuance of Units  176,201  579 
Distributions, Net of DRIP and Other  (31,575) (28,747)
Cash Used By Financing Activities  (46,337) (20,278)
Changes in Cash and Cash Equivalents During the
  (1,315) - 
Effect of exchange rate changes on cash   1,501  - 
Cash and Cash Equivalents, Beginning of Period   23,786  - 
Cash and Cash Equivalents, End of Period $ 23,972 $- 


A reconciliation of net income to NFFO is as follows:    
For the Three Months Ended March 31,   2018  2017 
($ Thousands, except per Unit amounts)     
Net Income $100,198 $141,133 
  Unrealized Gain on Remeasurement of Investment Properties  (61,235) (91,511)
  Realized Loss on Disposition of Investment Properties  -   80 
  Remeasurement of Exchangeable Units  (22) 311 
  Remeasurement of Investments(1)  739  - 
  Remeasurement of Unit-based Compensation Liabilities  1,602  5,800 
  Interest on Exchangeable Units  42  51 
  Corporate and Deferred Income Taxes  3,167  (23)
  Loss on Foreign Currency Translation  9,928  359 
  Unrealized and Realized Loss on Derivative Financial Instruments  6,037  (186)
  Net FFO Impact Attributable to Non-Controlling Interest  1,657   24 
  Amortization of Property, Plant and Equipment  1,273  964 
FFO $63,386 $57,002 
  Amortization of Loss from AOCL to interest and other Financing Costs  709  771 
  Net Mortgage Prepayment Cost  -   164 
NFFO  64,095  57,937 
  NFFO per Unit – Basic  0.463  0.429 
  NFFO per Unit – Diluted  0.458  0.423 
  Total Distributions Declared(2)  45,101  43,182 
  NFFO Payout Ratio(3)  70.4%  74.5% 
  Net Distributions Paid(2)  $32,223 $29,029 
  Excess NFFO over Net Distributions Paid $31,872 $28,908 
  Effective NFFO Payout Ratio(4)  50.3%  50.1% 

(1) Effective January 1, 2018, CAPREIT adopted IFRS 9 Financial Instruments. Under this standard, this investment has been designated as FVTPL whereas previously it was designated as available-for-sale. Under the guidance in this new standard, any mark-to-market gains or losses are recorded in the statement of income and comprehensive income whereas previously they were recorded through OCI. The cumulative mark to market gains/losses have also been reclassified from accumulated OCI to retained earnings on adoption of this standard.
(2)For the description of distributions declared and net distributions paid, see the Non-IFRS Financial Measures section in the MD&A for the three months ended March 31, 2018.
(3)The payout ratio compares distributions declared to NFFO.
(4)The effective payout ratio compares net distributions paid to NFFO.

Reconciliation of cash generated from operating activities to Adjusted Cash Flows from Operating Activities:

For the Three Months Ended March 31,  2018  2017  Annual 
($ Thousands, except per Unit amounts)      2017 
Cash Generated From Operating       
  Activities $ 81,603 $ 59,714 $ 358,941 
Interest expense included in cash flow       
  from financing activities (28,766) (27,370) (111,138)
Non-Discretionary Property Capital       
  Investments(3) (14,625) (9,843) (38,724)
Capitalized Leasing Costs(4) (1,615) (472) (3,234)
Amortization of Other Financing Costs(5) (1,643) (1,358) (5,689)
Non-controlling Interest (31) (12) (184)
Investment Income  361   4,044   8,478 
ACFO $ 35,284 $ 24,703 $ 208,450 
Total Distributions Declared $ 45,101 $ 43,182 $ 176,024 
(Deficit) Excess ACFO Over Distributions Declared$(9,817)$(18,479)$ 32,426 
ACFO Payout Ratio  127.8%  174.8%  84.4% 

(1) On a quarterly basis, a review of working capital is performed to determine whether changes in prepaids, receivable, deposits accounts payable and other liabilities, security deposits and other non-cash operating assets and liabilities were attributed to items which were not indicative of sustainable cash flows available for distribution in line with the ACFO guidance prescribed by REALPAC.
(2)Q1 2017 comparative balances have been restated to conform with current period presentation.
(3)Non-Discretionary Property Capital Investments for the three months ended March 31, 2018 and 2017 has been calculated as follows: Non-Discretionary Property Capital Investments per suite and site is based on the annual 2018 and 2017 forecasts respectively, divided by four for the quarter, and multiplied by the weighted average number of residential suites and sites during the period. The forecasted Non-Discretionary Property Capital Investments per suite and site for 2018 and 2017 on an annual basis is $1,183 and $827 respectively. The weighted average number of residential suites and sites for the three months ended March 31, 2018 and 2017 is 49,469 and 47,613, respectively. For a reconciliation of actual non-discretionary property capital investments incurred during the period to forecast, see the table on the next page.
(4)Comprises tenant inducements and direct leasing costs.
(5)Includes amortization of deferred financing costs, CMHC premiums, deferred loan costs and fair value adjustments.