2012 annual - Boardwalk REIT

Financial Performance Summary
At a Glance
In $000’s, except per unit amounts 2012 2011 % Change
Total Assets $ 5,675,302 $ 5,089,023 11.5%
Total Rental Revenue $ 439,901 $ 422,727 4.1%
Profit $ 688,514 $ 1,225,086 (43.8)%
Total Funds From Operations $ 150,343 $ 131,808 14.1%
Profit Per Unit $ 14.40 $ 24.40 (40.2)%
Funds From Operations Per Unit $ 2.87 $ 2.52 13.9%
Total Assets increased from the amounts reported in the prior year, mainly due to the continued compression of cap rates as investment
properties are now carried at fair value. Total Rental Revenue increased by 4.1%, the result of the improving occupancy and
rental rates. Profit decreased significantly, due to the recovery in 2011 of previously recorded deferred income tax liabilities.
Consolidated Operations and Earnings Review
Overall Review
Consolidated Statements of Comprehensive Income
Rental Operations
Boardwalk REIT’s rental revenue strategy focuses on enhancing overall rental revenues through the balance between market rents,
rental incentives, and occupancy losses. The application of this strategy is ongoing, on a market-by-market analysis, again with the
focus on obtaining the optimal balance of these variables given existing market conditions.
In $000’s, except number of suites
12 Months
2012
12 Months
2011 % Change
Total rental revenue $ 439,901 $ 422,727 4.1%
Expenses
Operating expenses $ 87,143 $ 84,400 3.3%
Utilities $ 39,921 $ 40,340 (1.0)%
Property taxes $ 36,773 $ 35,328 4.1%
$ 163,837 $ 160,068 2.4%
Net operating income $ 276,064 $ 262,659 5.1%
Operating margins 62.8% 62.1%
Number of suites at Dec. 31 35,277 35,277
Overall, Boardwalk REIT’s rental operations for the year ended December 31, 2012 reported higher results compared to the same
period in the prior year, with total rental revenue increasing 4.1% for the year ended December 31, 2012 compared to the prior year. The
increase in rental revenue is the combined effect of increases to market rents combined with decreases in both suite-specific rental
incentives and occupancy losses, as compared to the same period in 2011. Total rental expenses increased 2.4% for the year ended
December 31, 2012, compared to 2011, mainly due to higher onsite salaries and wages connected to our increased focus on customer
service. As was noted in the Trust’s disclosure in previous periods, over the past year, the Trust continued to hire additional staff to
assist in various Customer Service, quality control and internal capital projects.
The Trust also continues to track in detail the actual work performed by our onsite Associates to assist in the operating effectiveness
of its overall operations. This additional detail increased the accuracy of the amount allocated to its internal capital improvement
48 / MANAGEMENT’s DISCUSSION and analySIS Boardwalk REIT / ar 2012