Carindale Property Trust · ASX:CDP
Carindale Property Trust — Westfield Group — Investor Presentation (July 2005)
35 slides from Carindale Property Trust's investor presentation, Jul 19, 2005
Slide 1: Presentation on International Financial Reporting Standards
Westfield Group Presentation on International Financial Reporting Standards. Restatement of results for the six month period to 31 December 2004. 19 July 2005
Slide 2: Agenda
Agenda Introduction Key Differences Impacting Accounts Summary Income Statement Summary Balance Sheet Summary Cash Flow and Distribution Conclusion Appendix 1 Appendix 2 A-IFRS Accounting A-IFRS Transitional Issues Income Statement – detailed explanation of A-IFRS Summary Income Statemen
Slide 3: Introduction
Introduction The Westfield Group will report under Australian equivalents of International Financial Reporting Standards (“A-IFRS”) for the first time for the half year results to 30 June 2005. This will include restating the reported A GAAP financial statements for the half year period to 31 Dece
Slide 4: Introduction
Introduction The adoption of A-IFRS may cause increased income statement and balance sheet volatility primarily from: - property revaluations; - mark to market of derivatives that do not qualify for hedge accounting; and - deferred taxes. 4
Slide 5: Key Differences Impacting Accounts
Key Differences Impacting Accounts The key differences between reported A GAAP and A-IFRS that impact the Westfield Group financial statements include: - Revaluation of property investments, through the income statement. - Mark to market of derivatives that do not qualify for hedge accounting, thr
Slide 6: Summary Income Statement
Summary Income Statement 6 months ended 31 December 2004 A$ million Mark to Property Market of non Deferred Reported Revaluation qualifying interest Other A-IFRS A GAAP rate and currency Tax (unaudited) derivatives and preference shares EBIT 1,169 2,758 170 (460) 5 3,642 Interest (255) - (367) - (38
Slide 7: Summary Balance Sheet
Summary Balance Sheet As at 31 December 2004 A$ million Mark to Reported Paid in Market of non Deferred value of A GAAP qualifying interest Tax minority Other A-IFRS rate and currency interest (unaudited) derivatives and reclassified preference shares to debt Cash 236 - - - - 236 Property investment
Slide 8: Summary Cash Flow and Distribution
Summary Cash Flow and Distribution 6 months ended 31 December 2004 A$ million Reported A-IFRS Difference A GAAP (unaudited) Cash Flow Cash flows and interest from 686 610 (76) operating activities Cash flows used in investing activities (2,387) (2,349) 38 Cash flows from financing activities 1,602 1
Slide 9: Conclusion
Conclusion 1. There is no impact on the Group’s distribution as all A-IFRS adjustments are non cash. 2. The impact on recorded earnings of the non qualifying hedges does not affect the Westfield’s Group treasury policy of managing the economic and cash flow risk associated with interest rate and cur
Slide 10: Appendix 1
APPENDIX 1 A-IFRS Accounting Income Statement – detailed explanation of A-IFRS adjustments Balance Sheet – detailed explanation of A-IFRS adjustments Cash Flow Statement – detailed explanation of A-IFRS adjustments Derivatives – Interest Rate Hedging Derivatives – Balance Sheet and Curre
Slide 11: A-IFRS Accounting
A-IFRS Accounting 1. First time adoption of Australian Equivalents to International Financial Reporting Standards (AASB 1) 1 July 2004 is the opening A-IFRS balance date for the Group Brought forward A-IFRS adjustments are booked to retained earnings at 1 July 2004 Subsequent A-IFRS adjustment
Slide 12: A-IFRS Accounting (cont)
A-IFRS Accounting (cont) 1. First time adoption of Australian Equivalents to International Financial Reporting Standards (AASB 1) (cont) - There are currently ongoing discussions with regulatory bodies as to whether AASB 132 and AASB 139 can be early adopted whilst maintaining the equity classificat
Slide 13: A-IFRS Accounting (cont)
A-IFRS Accounting (cont) 2. Investment Property (AASB 140) a) Revaluations Revaluations are no longer recorded through the asset revaluation reserve and the brought forward balance of the asset revaluation reserve at 1 July 2004 is transferred to retained earnings. A-IFRS requires revaluations t
Slide 14: A-IFRS Accounting (cont)
A-IFRS Accounting (cont) 3. Financial Instruments Recognition and Measurement (AASB 139) The Westfield Group has a comprehensive hedging program that is used to manage the economic impact of interest and exchange rate risk. Derivatives are not entered into for speculative purposes and the intere
Slide 15: A-IFRS Accounting (cont)
A-IFRS Accounting (cont) 3. Financial Instruments Recognition and Measurement (cont) a) Currency Hedging Forward exchange contracts do not qualify for hedge accounting. Hedge accounting cannot be applied to derivatives entered into to hedge the foreign exchange exposure relating to revenues denomi
Slide 16: A-IFRS Accounting (cont)
A-IFRS Accounting (cont) 4. Income Taxes (AASB 112) AASB 112 only applies to taxable entities of the Group. WT is the major property owning entity in the Group which is not a taxable entity. Under A-IFRS deferred tax expense is recognised based on the differences between the tax cost base and th
Slide 17: A-IFRS Accounting (cont)
A-IFRS Accounting (cont) 5. Business Combinations (AASB 3) - Acquisition Accounting A-IFRS acquisition accounting is broadly consistent with reported A GAAP (the assets and liabilities of the acquired entity are recorded at fair value) except for the treatment of deferred tax. A-IFRS requires de
Slide 18: A-IFRS Accounting (cont)
A-IFRS Accounting (cont) 6. Financial Instruments: Disclosure and Presentation (AASB 132) a) Trust Units Units in fixed life trusts and/or where there is an unavoidable requirement to distribute income are considered debt under A-IFRS. This would result in the equity of the trust being reclassifie
Slide 19: A-IFRS Accounting (cont)
A-IFRS Accounting (cont) 6) Redeemable Preference Shares/Units and Convertible Notes (cont) Under A-IFRS the only minority interest remaining will be in relation to Carindale All financial instruments that convert to WDC securities whether or not settled in cash are recorded as a financial liabi
Slide 20: A-IFRS Accounting (cont)
A-IFRS Accounting (cont) 7. Leases (cont) b) Tenant Leases There is no change in accounting to reported A GAAP Leases with fixed rent step ups are required to be straight lined under A-IFRS For the United States, this accounting treatment had been applied under reported A GAAP For the remain
Slide 21: A-IFRS Accounting (cont)
A-IFRS Accounting (cont) 9. Share Based Payments (AASB 2) All executive share based compensation programs are measured at fair value. Employee share options that existed before the Merger (2 July 2004) are measured at fair value and amortised as an expense over the period from the grant date to
Slide 22: Income Statement Six months to December '04
Income Statement Six months to 31 December ‘04 Reported A-IFRS Difference A$ million A GAAP (unaudited) 6 months to 6 months to Dec ‘04 Dec ‘04 Property Income 1,517 3,784 2,2671 Contribution from equity accounted investments 104 561 4572 Deferred tax recognised on acquisition of assets - (460) (460
Slide 23: Notes to the Income Statement
Notes to the Income Statement Six months to 31 December ’04 1. Represents $2,296m property revaluations which is net of $2m for the amortisation tenant allowances; and reclassification of $29m of hedge gains to other income. 2. Equity accounted property revaluations of $462m which is net of $0.2m fo
Slide 24: Notes to the Income Statement (cont)
Notes to the Income Statement Six months to 31 December ’04 (cont) Equity Accounted Income Statement A$ million Reported A-IFRS Difference A GAAP (unaudited) Property Income 213 675 4621 Total Expenses (60) (59) 12 EBIT 153 616 463 Net Interest expense (49) (55) (6)3 Profit before tax 104 561 457 Ta
Slide 25: Balance Sheet As at December '04
Balance Sheet As at 31 December ’04 Reported A$ million A GAAP A-IFRS (unaudited) 31 December ‘04 31 December ‘04 Difference Cash 236 236 - Property investments 27,707 27,764 571 Net investment in equity accounted entities 3,790 3,327 (463)2 Other assets 2,548 2,416 (132)3 Total assets 34,281 33,743
Slide 26: Notes to the Balance Sheet
Notes to the Balance Sheet 31 December ’04 1. Represents $55m of tenant allowances (net of amortisation of $2m) being reclassified from property investments to deferred costs and the recognition of head leases of $112m as property investments. 2. Includes the recognition of deferred tax on the Duelg
Slide 27: Notes to the Balance Sheet (cont)
Notes to the Balance Sheet 31 December ’04 (cont) Equity Accounted Balance Sheet A$ million Reported A GAAP A-IFRS (unaudited) Difference Cash 57 57 - Property investments 7,182 7,193 111 Other assets 66 72 61 Total assets 7,305 7,322 17 Borrowings - - Interest bearing liabilities 3,394 3,394 - Fina
Slide 28: Cash Flow Statement Six months to December '04
Cash Flow Statement Six month to 31 December ’04 A$ million Reported A-IFRS Difference A GAAP (unaudited) Cash flows from operating activities1 686 610 (76)2,3 Cash flows used in investing activities (2,387) (2,349) 382 Cash flows from financing activities 1,602 1,640 383 Net decrease in cash (99) (
Slide 29: Derivatives - Interest Rate Hedging
Derivatives - Interest Rate Hedging A$ million Reported Reported A-IFRS INTEREST EXPOSURE A GAAP 31 A GAAP Dec 04 Interest bearing liabilities: - Consolidated net debt 13,538 - Equity Accounted debt 3,394 Cross currency swaps - A$166m, UK£162m (A$401m), 6,176 US$4,367.5m (A$5,609m) Total 23,108 HEDG
Slide 30: Derivatives - Balance Sheet and Currency Hedging
Derivatives - Balance Sheet and Currency Hedging Balance Sheet Hedging Reported Reported A-IFRS A$ million A GAAP 31 Dec 04 A GAAP Foreign currency denominated Net Assets - UK£236m (A$584m), US$4,893m (A$6,284m), 8,605 NZ$1,604m (A$1,737m) Cross currency swaps – UK£162m (A$426m), 6,550 Qualifies for
Slide 31: Appendix 2
APPENDIX 2 A-IFRS Transitional Issues Summary Income Statement – Transitional Period Summary Balance Sheet – Transitional Perod 31
Slide 32: A-IFRS Transitional Issues
A-IFRS Transitional Issues 1. As a result of the amendments to the constitution of WAT and WT on 12 May 2005, Trust equity can now continue to be reflected as equity for the six months to 30 June 2005. 2. If the Westfield Group elects to early adopt the standards on hedge accounting and debt or equi
Slide 33: Summary Income Statement - Transitional Period
Summary Income Statement - Transitional Period 6 months ended 31 December 2004 A$ million Mark to Property Market of non Deferred Reported Revaluation qualifying interest Other A-IFRS A GAAP rate and currency Tax (unaudited) derivatives and preference shares EBIT 1,169 2,758 - (460) 5 3,472 Interest
Slide 34: Summary Balance Sheet - Transitional Period
Summary Balance Sheet – Transitional Period As at 31 December 2004 A$ million Mark to Paid in Reported Market of non value of Deferred Other A GAAP qualifying interest Tax minority A-IFRS rate and currency interest (unaudited) derivatives and reclassified preference shares to debt Cash 236 - - - - 2
Slide 35: Disclaimer
Disclaimer The information provided in this presentation represents our current views of the consequences for the Westfield Group of adopting International Financial Reporting Standards and their Australian equivalents (A-IFRS). It is in the process of being independently verified or audited and the