SmartCentres Real Estate Investment Trust (SRUUN) Earnings Call Transcript & Summary

Good morning. I want to thank you all for joining us today. This is the Annual General Meeting of the holders of units and special voting units of SmartCentres Real Estate Investment Trust. The meeting will now come to order. Before we begin, kindly turn off mobile devices and alarm devices. Ushers are at the entrance to guide you to the washing facilities. My name is Mitchell Goldhar, and I am the Executive Chairman and Chief Executive Officer of SmartCentres and the trustee. Before we start the formal portion of the meeting, I will introduce the other trustees and officers of SmartCentres. In addition to myself, our current trustees are Janet Bannister, Garry Foster, Gregory Howard, Sylvie Lachance, Jamie McVicar, Sharm Powell; and Michael Young. After more than 20 years of service to SmartCentres, Mr. Jamie McVicar has decided not to stand for reelection at this year's annual meeting. On behalf of the Board of Trustees and the whole SmartCentres team, I would like to thank Mr. McVicar for his years of dedicated and valuable service. As noted in SmartCentres management information circular for this meeting, Mr. Neil Cunningham has been proposed for election at the meeting. In addition to myself, our officers are Peter Slan, Chief Financial Officer; Rudy Gobin, Executive Vice President Portfolio Management and Investments; Allan Scully, Executive Vice President Development; Paula Bustard, Executive Vice President Development; Dan Markou, Executive Vice President and Chief People and Culture Officer. Michael Young is the lead independent trustee of SmartCentres and will be the Chairman for this meeting. Michael?

Thank you, Mitch. As this meeting is being held in person and online via live webcast, I will first set out a few matters to facilitate the orderly conduct of the meeting. First, registered unitholders and proxy holders who wish to vote at the meeting and cast a ballot in person may do so. Ballots were provided when you signed in at the registration outside this room. Those registered unitholders and proxy holders who wish to vote at the meeting and cast a ballot online should have logged into the website by entering their 15-digit control number on their proxy form. Proxy holders, including beneficial owners who appointed themselves as proxy holders should have logged into the webcast by entering the 15-digit control number they received after they appointed themselves as proxy holder and registered with Computershare. If you have logged in or logged on properly, the electronic ballot will be displayed. You are encouraged to complete your voting as soon as practical since voting will close promptly after the conclusion of the formal business of the meeting. Be sure to stay connected to the Internet at all times in order to vote when the balloting begins. If you have voted your units prior to the start of the meeting, your vote has been received by the scrutineer and there is no need to vote during the meeting unless you wish to revoke or change your vote. Once the formal items of business are removed, we will take questions received from the floor and through the online messaging platform. The legal name of the submitting unitholder or proxy holder should be read aloud before the question is addressed. Questions that are redundant or have inappropriate language or otherwise are really disruptive to the orderly conduct of the meeting will not be addressed. General unitholder questions that do not directly relate to the meeting's items of business will not be addressed during the meeting but will be followed up on after the meeting. Given timing delays for our online participants, unitholders who are participating online are encouraged to submit their questions at the beginning of the meeting through the online messaging platform. These questions will be addressed during the meeting if they relate to a particular matter or will be addressed during the Q&A session immediately following the formal business of the meeting. If during the meeting, we encounter any technical difficulties with the webcast, please remain logged on, and we will resume as soon as possible. I would like to caution you by stating the following. Forward-looking statements may be made today, both during the formal portion of the meeting and during the Q&A session afterwards. Certain material factors and assumptions were applied in providing these statements, many of which are beyond our control. These statements are subject to a number of risks and uncertainties and could cause actual results to differ materially from those expressed or implied in such forward-looking statements. A summary of these underlying assumptions, risks and uncertainties is contained in our various securities filings, including our annual information form and management's discussion and analysis for the year ended December 31, 2023, and management's discussion and analysis for the 3 months ended March 31, 2024, all of which are available on SEDAR and on SmartCentres website. Forward-looking statements are made as of today's date and except as required by applicable securities laws, we undertake no obligation to publicly update or revise any such statements. Additionally, past performance is not indicative of future results given the risks and uncertainties described in our AIF and MD&As. We will now proceed with the formal portion of today's meeting. I call this meeting to order. With the consent of the meeting, I will appoint Chris Murray, legal counsel for SmartCentres as Secretary of this meeting and Computershare Trust Company of Canada represented by Louise Waltenbury as scrutineer for the meeting. A notice informing unitholders of the meeting along with a management information circular and a formal proxy were mailed to the holders of record of units and special voting units as of April 5, 2024. I will use the term unitholders to refer to both holders of units and holders of special voting units. The audited financial statements and related management discussion and analysis of SmartCentres for the year ended December 31, 2023, have also been mailed to anyone who requested to receive those documents. Computershare has provided an affidavit of mailing of the notice calling the meeting, the management information circular and the form of proxy for the meeting. I request that a copy of the notice of the Annual General Meeting of unitholders together with the affidavit requiring to the mailing -- attesting to the mailing of the notice, the management information circular in the form of proxy be kept by the Secretary with the records of the meeting. Unless someone objects, I propose to dispose with the reading of the notice of this meeting. The declaration of trust of SmartCentres provides that a quorum of this meeting is at least 2 persons present and holding or representing by proxy not less than 25% of the units and special voting units. The scrutineer's report shows that there are 80 holders of units present at the meeting holding or representing approximately 45.53% of the issued units of SmartCentres. There are also 24 holders of special voting units present at the meeting holding or representing by proxy 98.54% of the issued special voting units of SmartCentres. The total representation of this meeting present in person or represented by proxy is 65,852,149 units and 42,640,238 special voting units being 57.74% of the units and special voting units of SmartCentres in aggregate. I declare that the meeting has been regularly called and is properly constituted for the transaction of business. The scrutineer's report will be provided to the Secretary of the meeting and will be incorporated into the meeting's minutes. In order to expedite the formal part of the meeting, certain unitholders have been asked to propose and second various motions. While this procedure will assist with the handling of formal matters, it should not discourage any registered unitholder or proxy holder from speaking or submitting questions or remarks through the instant messaging service of the virtual interface in reference to any motion that after it has been proposed and seconded. If you wish to speak or when submitting a question or remark online, please indicate your name, which entity you represent, if any, and indicate whether you are a unitholder or a proxy holder. In the interest of fairness to all unitholders, I would ask to be brief with your questions and remarks limiting them to matters directly related to the meeting. As noted, there will be a general Q&A following the meeting. Unitholders are asked to complete their ballots whether in person or online and to return them. Once the online poll is closed after all items of business have been considered, and -- the scrutineer will tabulate the votes and -- the votes cast, and we will report on the results towards the end of the meeting. The first item of business is the presentation of the audited financial statements of SmartCentres Real Estate Investment Trust for the year ended December 31, 2023, and the auditor's report thereon. As stated earlier, the 2023 audited financial statements and related MD&A were mailed to all unitholders who requested to receive those documents. I do not propose to read the financial statements to the meeting nor to ask unitholders to approve the financial statements, but they be taken as presented to the meeting. The next item of business is to fix the number of trustees to be elected or appointed at this meeting. May I please have a motion?

I move to pick the aggregate number of trustees to be elected or appointed at this meeting at no more than 8.

I second the motion.

Thank you. You've heard the motion. Are there any questions on this matter?

Mr. Chairman, we have not received any online questions or comments related to this item.

Good. Motion approved. The next item of business is the election of trustees. As stated in the management information circular, the trustees of SmartCentres have adopted a policy that entitles unitholders to vote for each nominee on an individual basis. In addition, the trustees have adopted a policy stipulating that if the votes in favor of a nominee for the election of a trustee of SmartCentres represent less than a majority of the units voted and withheld, the nominee will submit his or her resignation after the meeting for consideration of the Corporate Governance and Compensation Committee. It is proposed that the 6 nominees set out in the management information circular be elected as trustees to hold office until the next annual meeting or until their successors are elected or appointed. The Penguin Group has confirmed that Gregory Howard and Michael Goldhar will be the Penguin Group nominees appointees to the remaining 2 trustee positions on the board. I entertain motions for the nominations of persons to be elected to the 6 trustee positions to be determined by the unitholders of SmartCentres. The nominees for election for the 6 trustee positions to be determined by the unitholders of SmartCentres to hold office until the next annual meeting of unitholders or until their successors are elected or appointed are Janet Bannister, Neil Cunningham, Garry Foster, Sylvie Lachance, Sharm Powell; and myself, Michael Young.

I nominate the nominees for trustee named in the management information circular prepared for this meeting for election as trustees of the Trust to hold office until the next Annual Meeting of Unitholders or until their successors are elected or appointed.

Thank you, Rudy. As no notice of additional trustee nominations was received in accordance with SmartCentres' advanced notice policy, I declare nominations closed. Are there any questions or comments submitted in connection with the election of trustees?

Mr. Chairman, we have not received any questions or comments related to this item.

Thank you. The next item of business is the appointment of the auditor of SmartCentres for the next year. Rudy?

I move that PricewaterhouseCoopers LLP, chartered professional accountants, be appointed the auditors of SmartCentres for the ensuing year and that trustees of SmartCentres be authorized to fix the remuneration of such auditor.

I second the motion.

Thank you. You have heard the motion. Are there any questions or comments submitted in connection with the appointment of the auditor?

Mr. Chairman, we have not received...

How long has this firm been with the auditors of the trust?

I think it's been 19 years. And as noted in our management information circular, we did do a comprehensive review of the external auditors and concluded that they remain independent and it was the Audit Committee's recommendation that they'd be reappointed for this year.

We have not received any online questions or comments related to this item.

Good. Thank you. As noted on Pages 72 and 73 of the management information circular prepared for this meeting, unitholders are asked to consider an annual nonbinding advisory resolution respecting to our approach to executive compensation. As this is an advisory vote, the results will not be binding on the Board of Trustees of SmartCentres. However, the Board of Trustees will take the results of the vote into account as appropriate when considering future compensation policies, programs and decisions. May I please have a motion?

I move that on an advisory basis and not to diminish the role and responsibilities of the Board of Trustees of SmartCentres, the approach to executive compensation as disclosed in the Management Information Circular of SmartCentres dated April 5, 2024, be accepted.