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Press release from CNW Group

MORGUARD CORPORATION ANNOUNCES 2010 RESULTS AND REGULAR ELIGIBLE DIVIDEND

Wednesday, March 02, 2011

MORGUARD CORPORATION ANNOUNCES 2010 RESULTS AND REGULAR ELIGIBLE DIVIDEND17:16 EST Wednesday, March 02, 2011TSX: MRCMISSISSAUGA, on, March 2 /CNW/ - Morguard Corporation (TSX: MRC) announced its financial results for the year ended December 31, 2010.HighlightsFunds from operations increased to $118.8 million, or $8.76 per share, compared to $114.3 million, or $8.14 per share in 2009;Net income increased $14.3 million, to $44.6 million in 2010 compared to $30.3 million in 2009;Total revenues for the year ended December 31, 2010, were $350.0 million compared to $348.8 million in 2009;Net operating income increased to $151.8 million compared to $150.9 million in 2009;On July 30, 2010, the Company and Morguard REIT, each acquired a 50% interest in an office property and excess land located in St. Laurent, Quebec for a purchase price of $165 million (100%).  The acquisition was funded by cash and a ten year mortgage payable of $88 million (100%) at an interest rate of 5.48%;During the year ended December 31, 2010, the Company repurchased and cancelled 905,850 common shares at a total cost of $40.4 millionAll amounts in thousands of Canadian dollars, except per share amounts, unless otherwise noted.FINANCIAL HIGHLIGHTS Year ended December 31,        (in thousands of dollars)20102009Income from real estate properties$277,762$280,202Management and advisory fees65,92163,440Sales of product and land6,2845,125Total revenues$349,967$348,767   Income from real estate properties$277,762$280,202Property operating expense  (125,932)  (129,276)Net operating income$151,830$150,926   Funds from operations$118,775$114,256   Net income$44,552$30,291   Income per share:   Basic and diluted  - net income$3.28$2.16Net Income Net Income increased by $14.3 million in 2010 to $44.6 million compared to $30.3 million in 2009. The increase is primarily due to an increase of  gains realized on the sale of real estate properties in the amount of $8,500, an increase in revenue from management and advisory fees of $2,481, an increase in net operating income of $904, an increase in interest and other income of $3,749, a decrease in interest expense of $2,732, a decrease in  amortization expense of $3,770 and a provision for impairment of real estate properties of $7,729 recorded in 2009 compared to $209 recorded in 2010. These items were partially offset by an increase in property management and corporate expenses of $3,484, and an increase in income taxes of $11,770.Net Operating Income     (In thousands of dollars)20102009Net operating income - Canadian properties  Multi-unit residential - Canada$51,030$47,764Retail - Canada26,72127,299Office and industrial37,54635,311 115,297110,374Net operating income - U.S. properties in U.S. dollars  Multi-unit residential - U.S.US 16,006US 15,293Retail - U.S.US 19,452US 20,217 US 35,458US 35,510Exchange amount to Canadian dollars1,0755,042Net operating income - U.S. properties in Canadian dollars36,53340,552Net operating income$151,830$150,926Net operating income ("NOI") for the year ended December 31, 2010, increased by $904 to $151.8 million compared to $150.9 million in 2009.  The increase was predominantly the result of the following:higher NOI in Canadian multi-unit residential properties as a result of an increase in revenue due to lower vacancy rates and higher rental rates achieved, as well as a decrease in utility expenses as a result of lower consumption and rate reductions for natural gas and an increase in the payment received in 2010 relating to a contract to purchase natural gas;higher office and industrial NOI as a result of the acquisition of Place Innovation which occurred on July 30, 2010, in the amount of $2,739;Offset by:lower Canadian retail NOI due to the sale of a 50% interest in Prairie Mall, Grande Prairie, Alberta, on May 31, 2010, in the amount of $1,510; which was partially offset by an increase in revenue at other retail properties as a result of higher recoveries and temporary tenancies;a 9.8% decrease in the U.S. dollar foreign exchange rate, which decreased NOI by $3,967Funds from Operations ("FFO") FFO was calculated as follows: Years ended December 31(In thousands of dollars except for per share amounts)20102009Net income for the year from continuing operations$44,441$29,131Items not affecting cash:   Amortization61,63965,707 Future income taxes2,312(4,250) Non-controlling interest(159)(74)Equity income from Morguard REIT - continuing operations(12,960)(12,788)Morguard REIT's equity accounted FFO - continuing operations33,09730,105Gain on sale of properties(9,971)(1,471)Provision for impairment of real estate properties2097,729Funds from continuing operations$118,608$114,089Morguard REIT's equity accounted FFO from discontinued operations167167Funds from operations$118,775$114,256 Per share amounts - basic and diluted$8.76$8.14For the year ended December 31, 2010, the Company recorded consolidated FFO from operations of $118.8 million ($8.76 per diluted share) compared to $114.3 million ($8.14 per diluted share) in 2009, representing an increase of $4,519 or 4.0%. FFO increased primarily due to an increase in NOI of $904, net profit from the sale of land and product of $651, an increase in management and advisory fee revenue of $2,481, an increase in Morguard REIT's equity accounted FFO of $2,992, an increase in interest and other income of $3,749, a decrease in interest expense of $2,732; partially offset by an increase in property management and corporate expenses of $3,484 and an increase in current income taxes of $5,208.  The change in foreign exchange rates decreased FFO by $1,294 ($0.09 per share).FIRST QUARTER DIVIDENDThe board of directors of Morguard Corporation announced today that the first quarterly eligible dividend of 2011 in the amount of $0.15 per common share would be paid on March 31, 2011, to shareholders of record at the close of business on March 15, 2011.The Company's audited financial statements for the year ended December 31, 2010, along with the Management's Discussion and Analysis will be available on the Company's website at www.morguard.com and will be filed with SEDAR at www.sedar.com.Readers are cautioned that although the terms "Net Operating Income", and "Funds From Operations" are commonly used to measure, compare and explain the operating and financial performance of Canadian real estate companies and such terms are defined in the Management's Discussion and Analysis, such terms are not recognized terms under Canadian generally accepted accounting principles.  Such terms do not necessarily have a standardized meaning and may not be comparable to similarly titled measures presented by the other publicly traded entities.Morguard Corporation is a real estate company, which owns a diversified portfolio of 100 properties in Canada and the United States.  Morguard's portfolio has a book value of approximately $1.6 billion and comprises 6.9 million square feet of commercial space and 10,303 apartment suites.  For more information, visit the Company's website at www.morguard.com.For further information: Morguard Corporation K. (Rai) Sahi      Chief Executive Officer     (905) 281-3800      Paul Miatello Chief Financial Officer (905) 281-3800