Teranet Reports 2006 Year-End and Fourth Quarter Results


    -   Strong Distributable Cash of $88.3 million or
        $0.57 per unit (for the period June 16, 2006 to December 31, 2006)
    -   Annual revenue of $239 million, up 6.2%
    -   Annual Adjusted EBITDA of $159.9 million, up 3.1%
    -   Continued expansion of automated parcel base
    -   Other value-added services revenue up 36%

    TORONTO, March 30 /CNW/ - Teranet Income Fund ("Teranet" or the "Fund")
(TSX: TF.UN) today announced its annual and fourth quarter results for the
period ended December 31, 2006.
    "Teranet's annual results showed growth in revenue and earnings and
strong distributable cash, driven by higher registration and search volumes,
introduction of electronic registration to 16 new land registry offices,
increased market adoption of our value-added services, and reduced debt costs.
Our automation and conversion of Ontario land information is on schedule,
providing a growing base of potential revenue that also historically benefits
from organic growth," said Aris Kaplanis, President and Chief Executive
Officer of Teranet Inc. "We are encouraged that the market fundamentals for
Teranet, including low unemployment rates, low interest rates and net positive
migration, remain positive."
    The Fund began operations on June 16, 2006. Therefore, the operating
results for the one-year period from January 1 to December 31, 2006, are the
combined operating results of Teranet Inc. and the Fund.
    Total revenue for the year ended December 31, 2006 was $239 million, an
increase of 6.2% or $13.9 million from $225.1 million in the corresponding
period of 2005. The increase is primarily due to higher registration and
search volumes in all key registration areas: Purchase and Sales, Refinancing
and Other. A 36% increase in other value-added services revenue also
contributed to the overall revenue growth. Total revenue for the fourth
quarter ended December 31, 2006 was $57.3 million compared to $58.7 million
for the same period in 2005, a decrease of $1.4 million. The decrease is
mainly attributed to a decline in Refinancing activity while Purchase and
Sales and Other registration activity remained consistent
    For the year, total operating expenses before amortization, other
expenses, interest expense, income taxes and non-controlling interest were
$82.6 million. Operating expenses of $195.3 million in the prior year included
$125.3 million of long-term incentive plan obligations and transaction costs
that were incurred for the twelve-month period ended December 31, 2005. For
the fourth quarter, total operating expenses were $22.8 million. In the
comparable period of 2005, operating expenses of $69.6 million included
$50.3 million of long-term incentive plan obligations and transaction costs
mentioned above. Excluding these obligations and transaction costs, operating
expenses increased $9.1 million for the year and $3.4 million for the fourth
quarter, primarily due to higher costs associated with being a public company
and other compensation related charges.
    Adjusted EBITDA(*) for the year was $159.9 million, an increase of 3.1%
from $155.1 million for the prior year. The increase in Adjusted EBITDA for
the year is largely due to the revenue growth and was partially offset by new
public company costs, higher capital taxes and other compensation charges.
Adjusted EBITDA(*) for the fourth quarter was $34.5 million compared to
$39.3 million for the fourth quarter of 2005, representing a decrease of
$4.8 million primarily due to the reasons noted above for the annual results.
    Distributable Cash for the period from June 16, 2006 to December 31, 2006
was $88.3 million or $0.5699 per unit and reflects the growth in revenue from
adding new properties to the ELRS, favourable interest rates on the Company's
new bonds and proceeds from a non-recurring sale of an investment of
$6.3 million or $0.0406 per unit. Distributions declared for this period were
$62.6 million or $0.4042 per unit. Distributable Cash for the fourth quarter
was $29.6 million or $0.1909 per unit and includes year-end compensation
related charges recorded in the quarter. Distributions declared for the
quarter were $29.1 million or $0.1875 per unit.
    For the year, the automated parcel base grew by 7.8% to 4.9 million
properties, representing 90% of the estimated provincial parcel base. This is
up from 4.5 million automated parcels at December 31, 2005, which represented
86% of the provincial parcel base.
    Registration volumes increased 2.2% for the year, to 1,920,300
transactions and search volumes increased 5.8% to 2,461,000 transactions.
Registration volumes for the fourth quarter were 455,700, a decrease of 8.7%
while search volumes for the quarter grew by 2.3% to approximately 583,900
    Teranet continues to make investments in its future. For the year, total
capital expenditures were $31 million, consisting of deferred ELRS
implementation costs of $26.5 million and maintenance capital expenditures of
$4.5 million. For the fourth quarter, total capital expenditures were
$6.8 million, consisting of deferred ELRS implementation costs of $5.5 million
and maintenance capital expenditures of $1.3 million.
    Teranet's cash position as at December 31, 2006, was $218.9 million of
which $98.8 million was restricted in nature.


    Management's outlook remains positive. The land parcel base, on which the
Fund earns a substantial portion of its revenue, is expected to grow as
Teranet continues to automate properties in Ontario. At the same time, the
Company expects to benefit from organic growth in the parcel base and to
pursue growth from other value-added services.
    On an annualized basis, management expects to incur maintenance capital
expenditures of approximately $5.0 million or $0.0323 per unit. Management
believes that the performance of the Fund is on track to meet ongoing
requirements for working capital and capital expenditures, and to sustain
monthly distributions to unitholders.
    Teranet's management's discussion and analysis and consolidated financial
statements and accompanying notes are available on the company's web site at
www.teranet.ca or on www.sedar.com.

    (in thousands of dollars except volume and parcel base data)

                    Three-month period    Period from   Twelve-month period
                     ended December 31    June 16, to    ended December 31
                       (unaudited)        December 31       (unaudited)
                      2006(1)     2005(2)     2006(3)     2006(4)     2005(2)
     registration $   27,476  $   29,974  $   65,623  $  115,769  $  112,763
     search            4,874       4,777      11,125      20,589      19,286
     writs             6,521       7,034      16,327      28,689      29,705
     services(5)      11,762      11,721      26,690      47,982      44,286
     services(6)       6,695       5,177      14,694      25,971      19,059
     revenue      $   57,328  $   58,683  $  134,459  $  239,000  $  225,099

     volumes         455,698     498,874   1,087,797   1,920,301   1,878,265
    Search volumes   583,915     570,760   1,330,230   2,460,989   2,326,305

    Parcel Base as
     at December 31:    2006        2005        2006        2006        2005
     (Automated)   4,876,691   4,525,694   4,876,691   4,876,691   4,525,694
    Automated %        90.3%       85.6%       90.3%       90.3%       85.6%

    (1)  These amounts are based on results as presented in internally
         prepared financial statements for the Fund.
    (2)  All results for all periods prior to June 16, 2006 are based on
         results as presented in internally prepared financial statements for
         the Company.
    (3)  These amounts are derived from the Fund's audited consolidated
         financial statements dated December 31, 2006.
    (4)  For comparison purposes, these amounts are based on operating
         results of the Company from January 1, 2006 to June 15, 2006
         preceding the public offering of units and for the period from
         June 16, 2006 to December 31, 2006 of the Fund on a combined basis
         to arrive at combined pro forma operating results for the twelve-
         month period ended December 31, 2006.
    (5)  Teraview value-added services include ancillary revenue of less than
    (6)  Other value-added services include revenue from non-statutory new
         business products and statutory ancillary revenue from onsite
         automated land registry offices.

    Conference Call & Webcast

    Teranet will hold a conference call and live audio webcast on Friday,
March 30, 2007 at 10 a.m. (ET) to discuss the Fund's financial results for the
period ended December 31, 2006. To participate in the teleconference, please
dial 416-644-3417 or 1-800-732-9307. To access the live audio webcast, please
visit Teranet's web site at www.teranet.ca. The call will be archived on the
web site as a webcast and a podcast. A replay of the conference call will be
available until end of day Friday, April 6, 2007. To access the replay, please
dial 416-640-1917 or 1-877-289-8525 and enter the passcode 21220781 followed
by the number sign.

    About Teranet Income Fund and Teranet

    Teranet Income Fund is an unincorporated, open-ended trust established
under the laws of Ontario by way of a declaration of trust. The Fund was
created to indirectly acquire all of the outstanding shares of Teranet Inc.
The units of the Fund trade on the Toronto Stock Exchange under the symbol
    Teranet is a leading provider of integrated land-based information
products and services. Teranet operates in Ontario and provides access to the
Ontario Electronic Land Registration System ("ELRS") through its proprietary
application, Teraview(R) software. This product enables customers to conduct
electronic registrations as well as title and writ searches relating to real
property. Teranet has the exclusive right to access the data in and operate
the ELRS and the Writs of Execution database, and create and market
value-added products and services in connection with the ELRS and writs until
March 31, 2017. These licences extend on a non-exclusive basis in perpetuity
for the ELRS and until 2047 for writs. Teranet has leveraged its core
capabilities to create electronic service offerings in complementary
information and e-commerce areas.

    (*) Non-GAAP Measures

    This discussion makes reference to Adjusted EBITDA and Distributable Cash
to assist in assessing the Fund's financial performance. Adjusted EBITDA and
Distributable Cash, however, are not recognized earnings measures under GAAP
and do not have standardized meanings prescribed by GAAP. Therefore, Adjusted
EBITDA and Distributable Cash may not be comparable to similar measures
presented by other issuers. References to Adjusted EBITDA are to earnings
before interest, income taxes, depreciation, amortization, other,
non-controlling interest and certain non-recurring items. References to
Distributable Cash are to Adjusted EBITDA, as adjusted for maintenance capital
expenditures and other adjustments listed in the reconciliation provided in
the Management's Discussion and Analysis of Financial Condition and Results of
Operations. Distributable Cash is not intended to be representative of cash
flow or results of operations determined in accordance with GAAP. As the Fund
intends to pay cash distributions in equal monthly amounts on an ongoing
basis, management believes that Adjusted EBITDA and Distributable Cash are
important measures in evaluating its performance.

    Forward-Looking Statements

    This news release contains statements that, other than statements of
historical fact, may be forward-looking statements about the objectives,
financial condition and results of operations of the Fund. These statements
are forward-looking and reflect management's current views and are based on
certain assumptions and expectations as of March 29, 2007. Actual results
could be materially different from expectations if known or unknown risks
affect the business, or if estimates or assumptions turn out to be inaccurate.
No forward-looking statement is a guarantee of future results. Investors are
cautioned not to place undue reliance on such forward-looking statements.
Forward-looking statements do not take into account the effect that
transactions or non-recurring items announced or occurring after the
statements are made may have on the business. Teranet disclaims any intention
or obligation to update any forward-looking statement even if new information
becomes available, as a result of future events or for any other reason. These
statements are subject to a number of risks described in the Risks and
Uncertainties section of the MD&A, which is available at www.sedar.com. Risks
and Uncertainties may cause actual results to differ materially from those
contained in forward-looking statements.

For further information:

For further information: Bonnie Foster, Vice President Corporate
Communications, (416) 643-1095, bonnie.foster@teranet.ca, www.teranet.ca

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