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Press release from CNW Group

Morguard Real Estate Investment Trust announces 2013 first quarter results

Thursday, May 02, 2013

Morguard Real Estate Investment Trust announces 2013 first quarter results

16:00 EDT Thursday, May 02, 2013

TSX: MRT.UN

MISSISSAUGA, ON, May 2, 2013 /CNW/ - Morguard Real Estate Investment Trust ("the Trust") (TSX: MRT.UN) today is pleased to announce its operating results for the three months ended March 31, 2013. ("Q1").  These results have been prepared in accordance with International Financial Reporting Standards ("IFRS").

Highlights

Funds from Operations (FFO)

  • Funds from operations for Q1 2013 was $24.9 million, up $5.3 million from the $19.6 million reported for the same period in 2012.  On a per unit diluted basis, funds from operations for Q1 2013 was $0.37, as compared to $0.33 reported for the same period in 2012.
  • 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 Q1 2013 was $40.2 million, up $7.7 million from the $32.5 million reported for the same period in 2012.
  • 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 Income

  • Net income for Q1 2013 was $75.9 million, an increase of $31.9 million from the $ 44.0 million reported for the same period in 2012. The increase was significantly impacted by higher fair value gains on real estate properties recorded in the current quarter and strong earnings performance from the Trust's property portfolio mainly resulting from the impact of the Penn West acquisition made by the Trust in October 2012.


Operations

  • The portfolio occupancy remained stable and was 96% at March 31, 2013, at December 31, 2012, and at March 31, 2012.

Financial Results
FFO for Q1 2013 was $24.9 million, up $5.3 million from the $19.6 million reported for the same period in 2012.  On a per unit diluted basis, funds from operations for Q1 2013 was $0.37, as compared to $0.33 reported for the same period in 2012.

Net income for Q1 2013 was $75.9 million, an increase of $31.9 million from the $44.0 million reported for the same period in 2012. The increase was highly impacted by higher fair value gains on real estate properties recorded in the current quarter and strong earnings performance from the Trust's property portfolio mainly resulting from the impact of the Penn West acquisition made by the Trust in October 2012.

At March 31, 2013, the Trust's total enterprise value was approximately $2.3 billion (based on the market closing price of the Trust's units on March 31, 2013 plus total debt outstanding). At March 31, 2013, the Trust had $1.2 billion of outstanding debt, equating to debt to total value ratio of 50.9%. The Trust's debt consisted of $980.5 million of fixed-rate debt with a weighted average interest rate of 4.9% and a weighted average term to maturity of 4.64 years, $8.3 million utilization of the operating line of credit, $50.0 million in notes payable and $144.6 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 43.3%.

Operating Results

Net Operating Income - Same Assets

(In thousands of Canadian dollars, except percentages) Three months ended March 31  
  2013 2012 Variance %
         
Retail $  20,034 $  19,196 $  838 4.4
Office 12,274         11,951 323 2.7
Other 1,157           1,210 (53) -4.4
Net operating income - same assets (1) 33,465 32,357 1,108 3.4

(1)  Not a term defined under IFRS

The same-assets comparison consists of the 51 properties that were owned throughout both the current and comparative three months periods. NOI, on a same-assets basis, increased $1.1 million, or 3.4%, in relation to the comparable three months period.

Leasing Activity

  • The Trust's portfolio remained well leased. The portfolio occupancy remained stable and was 96% at March 31, 2013, at December 31, 2012, and at March 31, 2012.

NET OPERATING INCOME, FUNDS FROM OPERATIONS
This 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 ANALYSIS
Morguard REIT's Q1 2013 Consolidated Financial Statement and Management's Discussion and Analysis along with its 2012 Annual Report are available on Morguard REIT's website at www.morguard.com and have been filed with SEDAR at www.sedar.com

ABOUT MORGUARD REAL ESTATE INVESTMENT TRUST
Morguard REIT is a closed-end real estate investment trust, which owns a diversified portfolio of 52 retail, office and mixed-use properties in Canada with a book value of $2.6 billion and approximately 8.9 million square feet of leaseable space.

Consolidated Balance Sheet

As at   March 31, December 31,
(In thousands of Canadian dollars)   2013 2012
         
Assets      
Real estate properties $ 2,649,061 $  2,592,740
Equity accounted investments   42,741 41,249
Amounts receivable   17,765 14,177
Other assets   6,904 1,531
Cash and cash equivalents   12,617 13,624
  $ 2,729,088 $  2,663,321
       
Liabilities      
Mortgages and bonds payable $ 980,468 $    956,069
Convertible debentures payable   144,625 144,356
Accounts payable and other liabilities   54,058 46,650
Notes payable   50,000 30,610
Bank indebtedness    8,270 54,853
    1,237,421 1,232,538
       
Unitholders' Equity   1,491,667 1,430,783
  $ 2,729,088 $  2,663,321



Consolidated Statements of Income and Comprehensive Income

(In thousands of Canadian dollars, except per-unit amounts)        
For the three months ended March 31   2013   2012
             
Revenue from real estate properties $ 70,429 $ 59,497
Property operating expenses   28,021   25,090
Property management fees   2,233   1,943
Net operating income   40,175   32,464
         
Interest expense   15,186   12,790
General and administrative   1,122   1,357
Amortization expense   11   12
Other income   (5)   (38)
Income before fair value gains on real estate properties        
and net income from equity accounted investments   23,861   18,343
         
Fair value gains on real estate properties   49,398   25,320
Net income from equity accounted investments   2,592   323
Net income for the period $ 75,851 $ 43,986
         
Other comprehensive income        
Amortization - cash flow hedge   246   241
Comprehensive income $ 76,097 $ 44,227
           
Net income per unit        
  Basic $ 1.18 $ 0.76
  Diluted $ 1.07 $ 0.72



Reconciliation of Net Income to Funds from Operations

(In thousands of Canadian dollars,except per-unit amounts)            
For the three months ended March 31 2013 2012
           
Net income for the period $ 75,851 $ 43,986
           
Add/(deduct) :          
  Accretion of convertible debentures   73   327
  Fair value gains on real estate properties          (49,398)   (25,320)
  Net income from equity accounted investments   (2,592)   (323)
  FFO from equity accounted investments         984   947
Funds from operations $ 24,918 $ 19,617
           
Funds from operations per unit:          
    Basic $ 0.39 $ 0.34
    Diluted $ 0.37 $ 0.33

 

 

 

 

 

SOURCE: Morguard Real Estate Investment Trust

For 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.

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