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Press release from CNW Group

Morguard Real Estate Investment Trust announces 2012 annual results

Thursday, February 28, 2013

Morguard Real Estate Investment Trust announces 2012 annual results19:30 EST Thursday, February 28, 2013TSX: MRT.UNMISSISSAUGA, ON, Feb. 28, 2013 /CNW/ - Morguard Real Estate Investment Trust ("the Trust") (TSX: MRT.UN) today is pleased to report 2012 annual operating results. These results have been prepared in accordance with International Financial Reporting Standards ("IFRS").HighlightsFunds from Operations (FFO)Funds from operations for the year ended December 31, 2012 was $83.4 million, up $3.9 million from the $79.5 million reported for the prior year.  On a per unit diluted basis, funds from operations for the 2012 year was $1.40, as compared to $1.35 reported for the prior year.Funds from operations is not a term defined under IFRS and may not be comparable to similar measures used by other Trusts. A reconciliation of net income to funds from operations is included.Net Operating Income (NOI)Net operating income for the year ended December 31, 2012 was $142.4 million, up $8.6 million from the $133.8 million recorded in 2011.Net operating income is an additional GAAP measure, but not a term defined under IFRS and may not be comparable to similar measures used by other Trusts. A calculation of net operating income is included.Net IncomeNet income for the year ended December 31, 2012 was $228.4 million, an increase of $70.1 million from the $ 158.3 million reported in 2011. The increase was significantly impacted by higher fair value gains on real estate properties recorded in 2012 and strong earnings performance from the Trust's property portfolio mainly resulting from the impact of acquisitions made by the Trust in late 2011.OperationsThe portfolio occupancy remains stable and was 96% at December 31, 2012, 95% at September 30, 2012, and at December 31, 2011.Financial ResultsFFO for the year ended December 31, 2012 was $83.4 million, up $3.9 million from the $79.5 million reported for the prior year.  On a per unit diluted basis, funds from operations for the 2012 year was $1.40, as compared to $1.35 reported for the prior year.Net income for the year ended December 31, 2012 was $228.4 million, an increase of $70.1 million from the $158.3 million reported in 2011. The increase was highly impacted by higher fair value gains on real estate properties recorded in 2012 and strong earnings performance from the Trust's property portfolio mainly resulting from the impact of acquisitions made by the Trust in late 2011.At December 31, 2012, the Trust's total enterprise value was approximately $2.4 billion (based on the market closing price of the Trust's units on December 31, 2012 plus total debt outstanding). At December 31, 2012, the Trust had $1.2 billion of outstanding debt, equating to debt to total value ratio of 51.1%. The Trust's debt consisted of $995.8 million of fixed-rate debt with a weighted average interest rate of 4.9% and a weighted average term to maturity of 4.47 years, $54.9 million utilization of the operating line of credit, $30.6 million in notes payable and $144.4 million of 4.85% fixed-rate convertible debentures.The Trust has a debt to gross book value of total assets ratio, as defined under the Declaration of Trust, of 45.3%.Operating ResultsNet Operating Income - Same Assets (in thousands of dollars)(In thousands of dollars, except percentages)20122011Variance%     Retail$  78,533$      78,096$       4370.6Office47,704        48,833(1,129)-2.3Other4,788          5,101(313)-6.1Net operating income - same assets (1)131,025132,030(1,005)-0.8(1)     Not a term defined under IFRSThe same-assets comparison consists of the 51 properties that were owned throughout both the current and comparative years. NOI, on a same-assets basis, decreased $1.0 million, or 0.8%, in relation to the comparable prior year.Leasing ActivityThe Trust's portfolio remains well leased. The portfolio occupancy remains stable and was 96% at December 31, 2012, 95% at September 30, 2012, and at December 31, 2011.NET OPERATING INCOME, FUNDS FROM OPERATIONSThis press release and accompanying financial information make reference to net operating income and funds from operations on a total and per unit basis.  Net operating income is defined as income from property operations after operating expenses have been deducted, but prior to deducting interest expense, general and administrative expenses and fair value gains (losses).  Funds from operations is defined as net income prior to extraordinary items, valuation adjustments, and certain other non-cash items, if any.FINANCIAL STATEMENTS AND MORGUARD'S DISCUSSION AND ANALYSISMorguard REIT's Q4 2012 Consolidated Financial Statement and Management's Discussion and Analysis along with its 2011 Annual Report are available on Morguard REIT's website at www.morguard.com and have been filed with SEDAR at www.sedar.comABOUT MORGUARD REAL ESTATE INVESTMENT TRUSTMorguard REIT is a closed-end real estate investment trust, which owns a diversified portfolio of 54 retail, office and mixed-use properties in Canada with a book value of $2.7 billion and approximately 9.1 million square feet of leaseable space.Consolidated Balance SheetAs atDecember 31,December 31,(in thousands of Canadian dollars)20122011     Assets  Real estate properties$     2,675,240$     2,119,084Amounts receivable14,2628,851Other assets1,5311,321Cash and cash equivalents15,1528,134 $     2,706,185$     2,137,390   Liabilities   Mortgages and bonds payable$       995,776$       799,672Convertible debentures payable144,35686,457Accounts payable and other liabilities49,80734,496Notes payable30,610—Bank indebtedness 54,85343,852 1,275,402964,477   Unitholders' Equity1,430,7831,172,913 $   2,706,185$    2,137,390Consolidated Statements of Income and Comprehensive Income(In thousands of Canadian dollars, except per-unit amounts)  For the years ended December 3120122011   Revenue from real estate properties$       252,816$       235,693Property operating expenses102,18494,238Property management fees8,2457,676Net operating income142,387133,779   Interest expense51,24950,689General and administrative5,1654,682Amortization expense4348Other (income) / expense (52)5Income before fair value gains on real estate properties85,98278,355   Fair value gains on real estate properties142,46479,947   Net income for the year $      228,446$      158,302   Other comprehensive income  Amortization - cash flow hedge972951Comprehensive income$      229,418$      159,253   Net income per unit   Basic$            3.82 $           2.77 Diluted$            3.81 $           2.62Reconciliation of Net Income to Funds from Operations(in thousands of Canadian dollars,except per-unit amounts)     20122011   Net income for the year     $    228,446     $     158,302   Add/(deduct) :   Accretion of convertible debentures(2,582)1,121 Fair value gains on real estate properties       (142,464)  (79,947)Funds from operations     $     83,400     $      79,476   Funds from operations per unit:    Basic$1.40$1.39  Diluted$1.40$1.35 SOURCE: Morguard Real Estate Investment TrustFor further information: K. (Rai) Sahi, President and Chief Executive Officer, Tel: 905.281.4800, or;    Tim Walker, Vice President and Chief Financial Officer, Tel: 905.281.4800