Walton Yellowhead Development Corporation Reports
Second Quarter 2014 Results

CALGARY, Alberta--()--Walton Yellowhead Development Corporation (the “Corporation”) announced today the Corporation’s results for the second quarter of 2014. Launched in 2011, the Corporation was formed to provide investors with the opportunity to participate in the acquisition and development of the 133.68-acre Yellowhead Industrial Park (the “Property”) located in the Winterburn Industrial Park, in northwest Edmonton, Alberta.

As previously reported, on April 30, 2014, the Corporation completed the sale of its entire right, title and interest in the Property for a total cash consideration of $36,677,800 and the assumption of the project debt in the amount of $5,528,982 for a total of $42,206,782. The Property was purchased by Yellowhead Lands Limited Partnership owned 85% by the Canada Pension Plan Investment Board; 7.5 % by WAM Development Group, an arm’s length third-party; and 7.5% by Walton International Group Inc.

For those investors who acquired 8%, unsecured, subordinated, convertible, extendable debentures and Class B non-voting common shares of the Corporation (the “Class B Shares”) under its prospectus offering in 2011 (the “Prospectus Offering”), the sale represents, as of April 30, 2014, a net internal rate of return of approximately 8.8% and a realization multiple of approximately 1.2 times, based on the offering price of those securities issued under the Prospectus Offering.

On May 12, 2014, the Corporation used the cash proceeds, together with its existing assets, to repay in full the principal amount of, and accrued interest on, all of its issued and outstanding debentures (including those interest debentures issued to satisfy the Corporation’s obligation to pay interest on previously issued debentures).

Under the Prospectus Offering, investors acquired units of the Corporation at a price of $10.00 per unit, with each unit comprised of a $7.50 principal amount debenture and one Class B Share at a price of $2.50. The distributions on the debentures were equal to $9.07 per debenture, which is comprised of the original principal amount of $7.50 and $1.57 in interest on the debenture. For the Class B Shares, investors received a $3.01 per Class B Share distribution. Total distributions to investors were $12.08 per $10.00 unit.

The following table shows the Corporation’s distributions to shareholders.

    Per Unit1   Dollars
  Date Bonds2   Equity   Total Bonds2   Equity   Total

Original
Investment

November 18, 2011 7.50 2.50 10.00 $21,669,420 $7,223,140 $28,892,560

First
Distribution

May 12, 2014 9.07 3.01 12.08 $26,201,872 $8,696,661 $34,898,533
1 2,889,256 units were issued

2 Distribution includes the principal, interest debenture, accrued interest on the interest debenture, and accrued
interest on the debenture


It is currently anticipated that the Corporation will maintain its corporate existence as a reporting issuer under corporate and securities laws until the first quarter of 2015 so as to confirm and satisfy all of its known outstanding liabilities, whereupon any material remaining assets of the Corporation will be distributed to the holders of the Class B Shares and the Corporation will be formally wound up and dissolved.

Second Quarter Financial Results

During the three months ended June 30, 2014, the Corporation recognized revenue from the sale of the Property of $42,206,782 and cost of sales relating to the sold Property of $36,773,071. This translated into a gross margin of $5,433,711. The Corporation also incurred total other expenses of $178,787. The total expenses primarily consisted of debenture interest of $75,046, $44,289 in costs for the management of the Corporation, and $32,549 in servicing fees. The net income before tax of $5,254,924 was partially offset by a tax expense of $1,318,126 resulting in a net income of $3,936,798.

During the six months ended June 30, 2014, the Corporation recognized revenue from the sale of the Property of $42,206,782 and cost of sales relating to the sold Property of $36,773,071. This translated into a gross margin of $5,433,711. The Corporation also incurred total other income of $374,383. The total expenses primarily consisted of debenture interest of $75,046, $177,155 in costs for the management of the Corporation, and $64,739 in servicing fees. The net income before tax of $5,059,328 was partially offset by a tax expense of $1,269,227 resulting in a net income of $3,790,101.

In May 2014, the Corporation used the proceeds from the sale to repay outstanding liabilities including $1,392,434 in management and servicing fees to Walton Asset Management L.P., and a distribution of $34,898,534 which included the payment in full of Debentures of $21,669,421, Interest Debentures of $3,321,479, accrued interest of $1,210,973 and a dividend distribution of $8,696,661. The remaining cash is being held as a reserve by the Corporation to pay for the remaining liabilities, operating expenses and any unforeseen expenses until the dissolution of the Corporation which is anticipated to be on or before March 15, 2015, at which time a final distribution will be made by the Corporation.

Additional Information

The Corporation is managed by Walton Asset Management L.P. and the development of the property is managed by Walton Development and Management (Alberta) LP, both of which are members of the Walton Group of Companies.

The Walton Group of Companies ("Walton") is a family-owned, multinational real estate investment, planning, and development group concentrating on the research, acquisition, administration, planning and development of strategically located land in major North American growth corridors.

Walton has been in business for over 30 years and takes a long-term approach to land planning and development. Walton’s industry-leading expertise in real estate investment, land planning and development uniquely positions Walton to responsibly transition land into sustainable communities where people live, work and play.

Its communities are comprehensively designed in collaboration with local residents for the benefit of community stakeholders. Its goal is to build communities that will stand the test of time: hometowns for present and future generations.

For more information about Walton Yellowhead Development Corporation, please visit www.sedar.com. For more information about Walton, visit www.Walton.com.

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This news release, required by Canadian laws, does not constitute an offer of securities, and is not for distribution or dissemination outside Canada. This news release contains forward looking information, and actual future results may differ from what is disclosed in this news release. The risks, uncertainties and other factors that could influence results are described in the prospectus and other documents filed with Canadian securities regulatory authorities and available online at www.sedar.com.

Except as otherwise noted, all amounts are in Canadian dollars, and are based on unaudited financial statements for the three months ended June 30, 2014, and related notes, prepared in accordance with International Financial Reporting Standards.

Contacts

For media inquiries, please contact:
Walton Yellowhead Development Corporation
Rick Abbruzzese, 1-646-790-4626
rabbruzzese@walton.com

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Contacts

For media inquiries, please contact:
Walton Yellowhead Development Corporation
Rick Abbruzzese, 1-646-790-4626
rabbruzzese@walton.com