Morguard Real Estate Investment Trust Announces 2013 Third Quarter Results

TSX: MRT.UN

MISSISSAUGA, ON, Nov. 4, 2013 /CNW/ - Morguard Real Estate Investment Trust ("the Trust") (TSX: MRT.UN) today is pleased to announce its operating results for the three and nine months ended September 30, 2013. ("Q3").  These results have been prepared in accordance with International Financial Reporting Standards ("IFRS").

Highlights

Funds from Operations (FFO)

  • Funds from operations for the three and nine months ended September 30, 2013 was $24.3 million and $73.6 million, respectively, as compared to $22.4 million and $61.8 million, respectively, for the same periods in 2012. On a per unit diluted basis, funds from operations for the three and nine months ended September 30, 2013 was $0.38 and $1.13, respectively, as compared to $0.38 and $1.06, respectively, for the same periods in 2012.  The increase in FFO is primarily due to the increase in NOI resulting from an acquisition completed by the Trust in October 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 the three and nine months ended September 30, 2013 was $39.6 million and $119.1 million, respectively, as compared to $33.7 million and $99.0 million, respectively, for the same periods 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 the three and nine months ended September 30, 2013 was $31.7 million and $158.8 million, respectively, as compared to $53.0 million and $143.9 million, respectively, for the same periods in 2012.

Operations

  • The portfolio occupancy remained stable and was 95% at September 30, 2013, at June 30, 2013 and at September 30, 2012.

At September 30, 2013, the Trust's total enterprise value was approximately $2.2 billion (based on the market closing price of the Trust's units on September 30, 2013 plus total debt outstanding). At September 30, 2013, the Trust had $1.2 billion of outstanding debt, equating to debt to total value ratio of 54.2%. The Trust's debt consisted of $990.9 million of fixed-rate debt with weighted average interest rate of 4.7% and weighted average term to maturity of 4.68 years, $145.1 million of 4.85% fixed-rate convertible debentures, $30.0 million in notes payable and $46.3 million utilization of the operating line of credit. The Trust has a debt to total assets ratio of 43.5%.

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 Q3 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 54 retail, office and mixed-use properties in Canada with a book value of $2.8 billion and approximately 9.1 million square feet of leaseable space.

           
Consolidated Balance Sheet          
           
As at September 30,   December 31,
(In thousands of Canadian dollars) 2013   2012
           
Assets          
Real estate properties $ 2,705,145   $ 2,592,740
Equity accounted investments   44,849     41,249
Amounts receivable   14,474     14,177
Other assets   9,828     1,531
Cash and cash equivalents   15,818     13,624
  $ 2,790,114   $ 2,663,321
           
Liabilities          
Mortgages and bonds payable $ 990,938   $ 956,069
Convertible debentures payable   145,127     144,356
Accounts payable and other liabilities   57,128     46,650
Notes payable   30,000     30,610
Bank indebtedness    46,267     54,853
    1,269,460     1,232,538
           
Unitholders' Equity   1,520,654     1,430,783
  $ 2,790,114   $ 2,663,321
           

 Consolidated Statements of Income and Comprehensive Income                
           

(In thousands of Canadian dollars)

Three months ended

Nine months ended

     
 
September  30,
2013
September  30,
2012
September  30,
2013
September  30,
2012
               
Revenue from real estate properties $ 68,945 $ 59,319 $ 206,529 $ 177,742
Property operating expenses   27,109   23,678   80,853   72,869
Property management fees   2,202   1,954   6,623   5,825
Net operating income   39,634   33,687   119,053   99,048
                 
Interest expense   14,694   11,027   44,519   36,393
General and administrative   1,387   1,267   3,624   3,769
Amortization expense   10   11   31   33
Other income   (1)   (6)   (6)   (45)
Income before fair value gains, gain on sale of real estate
properties and net income from equity accounted investments
  23,544   21,388   70,885   58,898
                 
Fair value gains on real estate properties   6,888   30,745   81,129   82,991
Gain on sale of real estate properties       2,058  
Net income from equity accounted investments   1,248   881   4,749   1,991
Net income for the period $ 31,680 $ 53,014 $ 158,821 $ 143,880 90,866
                 
Other comprehensive income                
Amortization - cash flow hedge   248   244   741   727
Comprehensive income $ 31,928 $ 53,258 $ 159,562 $ 144,607

                 
Reconciliation of Net Income to Funds from Operations                
                 
(In thousands of Canadian dollars,except per-unit amounts)

Three months ended

Nine months ended
         
  September  30, September  30,   September  30,   September  30,
  2013 2012   2013   2012
                     
Net income for the period $ 31,680 $ 53,014   $ 158,821   $ 143,880
                     
Add/(deduct) :                    
Fair value gains on real estate properties(1)   (7,351)   (30,649)     (83,144)     (82,038)
Gain on sale of real estate properties         (2,058)    
Funds from operations $ 24,329 $ 22,365   $ 73,619   $ 61,842
                     
Interest expense on convertible debentures   1,803   1,117     5,441     4,028
Diluted FFO $ 26,132 $ 23,482   $ 79,060   $ 65,870
                     
Funds from operations per unit:                    
  Basic   $0.38   $0.38     $1.15     $1.06
  Diluted(2)   $0.38   $0.38     $1.13     $1.06
                     
Weighted average units outstanding(in thousands)                    
  Basic   63,489   59,325     63,872     58,333
  Diluted(2)   69,586   62,545     69,970     61,553
(1) Includes fair value gains from equity accounted investments
(2) Includes dilutive impact of convertible debentures
   

 

 

 

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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