Mr. Gary Berman reports

TRICON CAPITAL GROUP ANNOUNCES Q2 2015 RESULTS AND CHANGES TO SENIOR MANAGEMENT TEAM

Tricon Capital Group Inc. has released its consolidated financial results for the three and six months ended June 30, 2015. (Dollar amounts are in U.S. currency, except where noted.) Key highlights for the first six months include:

• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) increased by 32 per cent year over year to $59.3-million (for the second quarter, increased by 70 per cent to $23.4-million compared with the same quarter in 2014);
• Adjusted basic earnings per share increased by 35 per cent year over year to 42 cents per share (for Q2, increased by 89 per cent to 17 cents per share compared with the same quarter in 2014);
• Year-to-date realized investment income from Tricon American Homes (TAH) hit a record $14.7-million, a 93-per-cent year-over-year increase (for Q2, increased by 108 per cent to $8.9-million compared with the same quarter in 2014), primarily driven by the completion of a portfolio acquisition of 1,385 single-family rental homes;
• Assets under management (AUM) increased by 25 per cent year over year to $2.3-billion ($2.9-billion (Canadian));
• Subsequent to the quarter, Tricon closed the Viridian separate account of $141.4-million and announced the launch of a new business vertical, Tricon Luxury Residences, with three initial purpose-built multifamily rental projects secured.

"Through the first half of 2015, Tricon continued to deliver strong EBITDA and earnings growth, reflecting solid performance across all business verticals," said Gary Berman, Tricon's president and chief executive officer. "Tricon's strength lies in its diversification across several strategic housing verticals, all with exciting growth opportunities. To that effect, we are thrilled to have recently announced Tricon's entry into the purpose-built rental apartment sector under the banner of Tricon Luxury Residences. This fourth major business line further diversifies Tricon's platform and provides another opportunity to leverage our expertise in a complementary segment of the housing market to create value for shareholders."

                                        FOR THE PERIODS ENDED JUNE 30
                        (In thousands of U.S. dollars, except for per-share amounts)

                                                           Three months                   Six months
                                                        2015          2014            2015          2014
Selected financial statement information
Net income (loss)                                     $7,234      $(11,848)        $(3,682)      $16,773
Basic earnings (loss) per share                         0.08         (0.13)          (0.04)         0.18
Diluted earnings (loss) per share                       0.04         (0.13)          (0.04)         0.18
Dividends per share (in Canadian currency)             $0.06         $0.06           $0.12         $0.12

Changes to senior management team

Tricon also announced changes to its senior management team.

Wissam Francis has been appointed chief financial officer of the company, effective immediately. Mr. Francis most recently was Tricon's executive vice-president, corporate finance. Prior to joining Tricon, he was a senior member of the Ernst & Young transaction real estate practice, and has extensive experience in mergers and acquisitions, corporate finance, and strategy formulation. Prior to joining Ernst & Young, Mr. Francis was the director of finance and acquisitions at First Capital Realty. Mr. Francis has over 15 years of experience in related fields, and has been actively involved in various projects and sectors, including retail, industrial, office, residential, mixed-use and development projects. Mr. Francis has a chartered professional accountant and chartered management accountant designation, and holds a master of business administration from Wilfrid Laurier University, a master of arts in economics from the University of Waterloo, and a bachelor of arts in finance and economics, and an honours degree in economics and mathematics from the University of Western Ontario.

June Alikhan has stepped down as interim chief financial officer but will stay with the company through the end of the year to help ensure an orderly transition before officially retiring. Ms. Alikhan will also provide consulting services to Tricon in 2016 and help the company with special projects.

Tricon also announced that Douglas P. Quesnel has been appointed chief accounting officer of the company, effective immediately. Mr. Quesnel joined Tricon in 2014 as vice-president -- finance, prior to which he was with Dream Unlimited Corp., where, over the previous 10 years, he served in senior financial executive roles, including chief accounting officer and chief financial officer of Dream Global REIT, and chief financial officer of Dream Unlimited Corp. In these roles, Mr. Quesnel was responsible for business planning and analysis, investor relations, financial reporting, and tax planning. Mr. Quesnel has a CPA and chartered accountant designation, and holds a graduate diploma in accounting from McGill University and a bachelor of commerce from Concordia University.

On May 27, 2015, Kevin Baldridge joined Tricon as president of TAH, with responsibility for day-to-day management of all aspects of Tricon's single-family rental home business. Mr. Baldridge has a demonstrated record of success in property management and operations, acquisitions, strategic planning, and marketing. Prior to joining TAH, Mr. Baldridge served as president of Irvine Company Apartment Communities, where his responsibilities included overseeing an apartment portfolio of more than 44,000 Class A rental units and close to 125 communities in California.

"As we continue to establish Tricon as a diversified housing brand, we are also making some important investments in our senior management team to prepare for the next wave of growth," said Mr. Berman. "Wissam Francis and Doug Quesnel each bring tremendous experience to our finance and accounting team, and, after their intense period of on-the-job training, we are confident they will be instrumental in helping to lead Tricon forward. Kevin Baldridge, a seasoned leader in the multifamily rental industry, has been hired to run Tricon American Homes day to day and to help further professionalize our newly internalized property management operation."

Mr. Berman also commented on Ms. Alikhan's retirement: "June has been a committed member of Tricon's core team for roughly 15 years and has been a steadying force throughout Tricon's transitions, first from a manager of high-net-worth capital to an institutional asset manager and then from a private to a public company. We will miss June and are deeply appreciative of her meaningful contribution to Tricon's long-term success. We wish her well in her retirement."

Financial highlights

For the six months ended June 30, 2015, net loss, as recorded in the financial statements, was $3.7-million, after providing for a fair-value loss on derivative financial instruments of $32.0-million related to the company's convertible debentures ($1.9-million gain in the prior year), as well as an unrealized foreign exchange gain of $9.5-million ($1.6-million gain in the prior year). For Q2 2015, net income was $7.2-million after providing for a fair-value gain on derivative financial instruments of $5.9-million ($100,000 gain in the prior year) and an unrealized foreign exchange loss of $1.2-million ($19.5-million loss in the prior year).

Adjusted net income, which excludes non-recurring and non-cash items, and better reflects the company's results, increased by $9.9-million or 35 per cent to $38.1-million for the six months ended June 30, 2015, compared with $28.3-million for the same period in 2014. For Q2 2015, adjusted net income increased by $6.9-million or 84 per cent to $15.1-million compared with $8.2-million for Q2 2014. Adjusted EBITDA increased by $14.3-million or 32 per cent to $59.3-million for the six months ended June 30, 2015, compared with $45.0-million for the same period in 2014.

Adjusted EBITDA for Q2 2015 increased $9.6-million or 70 per cent to $23.4-million compared with $13.7-million for Q2 2014. The increase was primarily driven by higher realized investment income and fair-value increases in Tricon American Homes' single-family rental platform, offset by a decrease in investment income in the company's Tricon Housing Partners business line.

Adjusted basic earnings per share and adjusted diluted earnings per share increased by 35 per cent to 42 cents and 35 cents, respectively, for the six months ended June 30, 2015, compared with 31 cents and 26 cents in the corresponding period in 2014. In Q2 2015, adjusted basic earnings per share and adjusted diluted earnings per share increased by 89 per cent and 100 per cent to 17 cents and 14 cents, respectively, compared with nine cents and seven cents in Q2 2014.

Assets under management increased by $467-million, or 25 per cent, to $2,343-million as at June 30, 2015, compared with $1,876-million as at June 30, 2014. The separate accounts and sidecar investments formed in 2014 and 2015, along with the aforementioned portfolio acquisition and fair-value adjustment of the TAH single-family rental home portfolio, were the primary drivers of the increase.

Operational highlights

Principal investments

Tricon Housing Partners (THP)

Investment income from THP decreased by $14.5-million or 53 per cent to $13.1-million for the first six months of 2015 compared with $27.6-million for the same period in 2014. In Q2 2015, investment income from THP decreased by 90 per cent or $6.1-million to $600,000 compared with $6.8-million for Q2 2014.

The decrease was largely driven by a delay in the timing of projected cash flows to be received from Faria Preserve, now expected in the first half of 2016 (with additional payments also expected after 2016) as per an executed agreement of purchase and sale with a large public home builder. This timing is later than previously projected, resulting in a decrease in fair market value of approximately $6.6-million associated with the delay in realized cash flows. The overall proceeds from the sale, notwithstanding the decrease in fair value, are in line with management's expectation.

In addition, the decrease of THP investment income resulted from a natural reduction in the outstanding capital balance of THP co-investments, as investments were realized and distributions were received.

Subsequent to the quarter-end, on July 16, 2015, the company closed a $141.4-million investment in an existing active 2,083-acre master-planned community in Dallas-Fort Worth, Tex., known as Viridian. The investment is being made in a new separate account under the terms of which Tricon has committed to invest $25.4-million, and an institutional investor has committed $116.0-million.

Tricon American Homes

Realized investment income from TAH increased by $7.1-million or 93 per cent to $14.7-million for the six months ended June 30, 2015, from $7.6-million for the same period in 2014. For Q2 2015, investment income from TAH increased by $4.6-million or 108 per cent to $8.9-million from $4.3-million for Q2 2014. The portfolio of rental homes owned has grown by 52 per cent to 6,513 homes as at June 30, 2015, compared with 4,274 homes as at June 30, 2014. The in-place occupancy increased by 9 per cent to 94 per cent as at June 30, 2015, compared with 85 per cent as at June 30, 2014. Year-to-date NOI (net operating income) gross margin decreased to 62 per cent as at June 30, 2015, when compared with full-year NOI margin of 63 per cent in 2014, largely as a result of the change in geographical mix resulting from the recent portfolio acquisition.

The fair value of the TAH portfolio increased by $33.1-million in the six months ended June 30, 2015, compared with an increase of $11.0-million in the same period in 2014. In Q2 2015, TAH recognized a fair-value gain of $14.8-million compared with $3.1-million in Q2 2014. The majority of homes were valued using the house price index methodology during the quarter.

In Q2 2015, TAH completed a $361.3-million securitization transaction, which involved the issuance and sale of six classes of single-family rental pass-through certificates that represent beneficial ownership interests in a loan secured by 3,505 single-family properties. The securitized loan has a 70-per-cent loan-to-value ratio with a blended effective interest rate of the London interbank offered rate plus 196 basis points. The net proceeds of the loan were used to repay the existing debt on the underlying properties, with the balance being utilized to finance the continued growth of the TAH portfolio and for other corporate purposes.

TAH also amended its dedicated warehouse credit facility, including an increase in leverage, a reduction in interest rate and a decrease of the total availability.

Tricon Lifestyle Communities (TLC)

On May 28, 2015, Tricon, through its partnership with Cobblestone, purchased a 100-per-cent freehold interest in an MHC located in Apache Junction, Ariz. (Apache MHP). The property comprises 17.5 acres of land and 192 residential spaces, of which 86 per cent was occupied as at June 30, 2015. Similar to Longhaven Estates, Apache MHP is classified as a 55-plus age-restricted community that has the potential to be improved over time through a capital expenditure program. Tricon and Cobblestone assumed the existing mortgage debt provided by Fannie Mae at 57-per-cent loan-to-value ratio with a remaining term of 7.5 years and fixed rate of 4.36 per cent.

Subsequent to quarter-end, the company contracted to purchase another five age-restricted communities in Phoenix, Ariz., with approximately 1,360 residential spaces and expects closing to occur in the fourth quarter, provided its due diligence is satisfied.

Tricon Luxury Residences (TLR)

On July 28, 2015, the company announced a new strategic initiative focused on the development and management of a portfolio of Class A purpose-built rental apartments across the United States and Canada. This new business vertical is being branded as Tricon Luxury Residences and will form the company's fourth major business line. TLR has secured two U.S. development opportunities in Dallas and Frisco, Tex., and one Canadian development opportunity in Toronto, Ont.

Private funds and advisory

Private funds and advisory AUM increased by 10 per cent or $100-million to $1.07-billion compared with $970-million as at June 30, 2014. The increase was largely due to the closing of separate account and sidecar investments in 2014 and 2015, and offset by distributions made by THP1 U.S., Canadian funds and separate accounts.

Contractual fees for the six months ended June 30, 2015, increased by $3.1-million or 41 per cent to $10.6-million compared with $7.6-million for the same period in 2014, primarily due to the acquisition of a majority interest in the Johnson Companies LP on April 15, 2014. Excluding Johnson, contractual fees increased by 9 per cent or $500,000 as a result of contractual fees received from the new separate account and sidecar investments added in 2014 and 2015. Contractual fees for Q2 2015 increased by $500,000 or 10 per cent to $5.2-million compared with $4.7-million for Q2 2014.

Subsequent events

On July 28, 2015, the company entered into an agreement with a syndicate of underwriters, co-led by RBC Capital Markets and GMP Securities LP, and including TD Securities Inc., BMO Capital Markets, National Bank Financial Inc., Raymond James Ltd., Canaccord Genuity Corp., CIBC World Markets Inc., Paradigm Capital Inc. and Scotiabank, which has agreed to purchase, on a bought-deal basis, 13,158,000 common shares of the company at a price of $11.40 (Canadian) per common share for gross proceeds of approximately $150-million (Canadian). The company has also granted the underwriters an option, which may be exercised by the underwriters at any time up to 30 days following the closing of the offering, to purchase up to an additional 1,973,700 common shares to cover overallotments, if any, and for market stabilization purposes. The net proceeds of the offering, including any proceeds from the overallotment option, will be used to partially finance the future equity requirements in each of the company's business verticals, including the new TLR vertical, and for general corporate purposes, including repayment of the outstanding balance under the company's corporate revolving credit facility. The offering is expected to close on or about Aug. 18, 2015.

Quarterly dividend

The company announced a dividend of six cents per share in Canadian dollars payable on Oct. 15, 2015, to shareholders of record on Sept. 30, 2015.

Tricon has a dividend reinvestment plan (DRIP), which allows eligible shareholders of the company to reinvest their cash dividends in additional common shares. Common shares issued pursuant to the DRIP in connection with the announced dividend will be issued from treasury at a 5-per-cent discount from the market price. Participation in the DRIP is optional, and shareholders who do not wish to participate in the plan will continue to receive cash dividends. A complete copy of the DRIP is available in the investor information section of Tricon's website.

Conference call and webcast

Management will host a conference call at 10 a.m. ET on Aug. 14, 2015, to discuss the company's results. Please call 1-647-788-4901 or 1-877-201-0168 (conference ID No. 75508231). The conference call will also be accessible via webcast at the Tricon Capital website (go to investor information -- events). A replay of the conference call will be available from 1 p.m. ET on Aug. 14, 2015, until midnight ET on Aug. 21, 2015. To access the replay, call 1-855-859-2056 or 404-537-3406 and use the passcode 75508231 followed by the pound sign.

The company's financial statements, and management's discussion and analysis are available on Tricon's website and have been filed on SEDAR. The financial information is presented in U.S. dollars.

We seek Safe Harbor.