Morguard Corporation Announces 2009 First Quarter Results



    MISSISSAUGA, ON, May 7 /CNW/ - Morguard Corporation (TSX: MRC) announced
its financial results for the three months ended March 31, 2009.

    
    HIGHLIGHTS

    -   Total revenues for the three months ended March 31, 2009, increased
        to $88.0 million from $80.9 million for the same period in 2008;

    -   Net operating income in Q1 2009 increased to $38.2 million compared
        to $34.9 million in 2008;

    -   Net income for the three months ended March 31, 2009, totalled $4.8
        million compared to net income of $29.0 million for the three months
        ended March 31, 2008;

    -   Funds from operations ("FFO") for the three months ended March 31,
        2009, increased to $27.5 million or $1.96 per share compared to $25.5
        million or $1.83 per share for the same period in 2008;

    FINANCIAL HIGHLIGHTS

    -------------------------------------------------------------------------
    Three months ended March 31,
    (in thousands of dollars)                               2009        2008
    -------------------------------------------------------------------------
    Income from real estate properties                  $ 72,060    $ 65,101
    Management and advisory fee revenue                   14,725      14,273
    Sales of product and land                              1,246       1,510
    -------------------------------------------------------------------------
    Total revenues                                      $ 88,031    $ 80,884
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Income from real estate properties                  $ 72,060    $ 65,101
    Property operating expense                           (33,902)    (30,182)
    -------------------------------------------------------------------------
    Net operating income                                $ 38,158    $ 34,919
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Fund from operations                                $ 27,539    $ 25,494
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Net income                                          $  4,829    $ 28,954
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Income per share
      Basic - continuing operations                     $   0.34    $   2.09
      Diluted - continuing operations                   $   0.34    $   2.07
      Basic - net income                                $   0.34    $   2.08
      Diluted - net income                              $   0.34    $   2.06
    

    NET INCOME

    Net income for the three months ended March 31, 2009, was $4.8 million
($0.34 per share) compared to $28.9 million ($2.09 per share) in 2008. The
reduction in net income was primarily due to (i) lower equity income from
Morguard Real Estate Investment Trust of $12.3 million (tax effected) due to
gains realized on the disposition of assets in 2008, and (ii) the
non-recurring reversal of a pension asset valuation allowance in the amount of
$13.9 million (tax effected) in 2008.

    
    NET OPERATING INCOME

    -------------------------------------------------------------------------
    Three months ended March 31,
    (in thousands of dollars)                               2009        2008
    -------------------------------------------------------------------------
    Multi-unit residential - Canada                     $ 10,607    $ 10,941
    Multi-unit residential - U.S.                          5,105       3,498
    Retail - Canada                                        6,954       6,414
    Retail - U.S.                                          6,452       5,214
    Office/Industrial                                      9,040       8,852
    -------------------------------------------------------------------------
    Net operating income                                $ 38,158    $ 34,919
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Net operating income for the three months ended March 31, 2009, increased
to $38.2 million compared to $34.9 million in 2008. The increase was mainly
due to the change in the U.S. dollar foreign exchange rate which increased
reported NOI by approximately $2.3 million. Net operating income also
increased as a result of higher occupancy levels in the U.S. multi-unit
residential and Canadian retail portfolios compared to 2008.

    FUNDS FROM OPERATIONS

    The real estate industry has adopted a measure of funds from operations
("FFO") to supplement net income as an operating performance measurement. The
Company's calculation of FFO is consistent with the definition provided by the
Real Property Association of Canada ("REALPac").
    FFO is defined as net income adjusted for amortization of buildings,
deferred leasing costs, intangible items and any gain or loss on sale of real
estate properties and any provisions against capital. FFO per share is
calculated by dividing FFO attributable to shareholders by the weighted
average number of shares outstanding for the period.
    FFO was calculated as follows:

    
    -------------------------------------------------------------------------
    Three months ended March 31,
    (in thousands of dollars)                               2009        2008
    -------------------------------------------------------------------------
    Net earnings from continuing operations             $  4,829    $ 29,149
    Items not affecting cash:
      Amortization                                        17,271      15,488
      Future income taxes                                    562      11,781
      Non-controlling interest                                 -        (227)
    Equity income from Morguard REIT -
     continuing operations                                (3,279)    (19,363)
    Morguard REIT's equity accounted FFO -
     continuing operations                                 7,706       8,107
    Gain on pension valuation allowance                        -     (19,441)
    Other                                                    450           -
    -------------------------------------------------------------------------
    Funds from operations                               $ 27,539    $ 25,494
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Per share amount - basic                            $   1.96    $   1.83
    Per share amounts - diluted                         $   1.96    $   1.81
    

    For the three months ended March 31, 2009, the Company recorded FFO of
$27.5 million ($1.96 per diluted share) compared to $25.5 million ($1.81 per
diluted share) in 2008. The increase of $2.0 million, or 7.8%, in FFO was
primarily the result of higher net operating income from real estate
properties in the amount of $3.2 million offset by a decrease in other income
of $0.9 million and a decrease in Morguard REIT's equity accounted FFO of $0.4
million.

    MORTGAGES PAYABLE

    A breakdown of maturities by asset type is provided in the table below.

    
                ------------------------------ ------------------------------
                             2009                           2010
                ------------------------------ ------------------------------
                                     Weighted                       Weighted
                 No. of   Principal   Average   No. of   Principal   Average
                 Proper    Maturing  Interest   Proper    Maturing  Interest
    Asset Type    -ties ($ millions)     Rate    -ties ($ millions)     Rate
    ------------------------------------------ ------------------------------
    Canada Multi-
     unit
     residential      3       $39.8     6.14%        1        $5.2     9.23%

    Canada
     Retail           1       $17.4     6.75%        2       $94.9     5.06%

    Canada
     Office
     /Industrial      1        $7.3     5.71%        2       $28.4     5.43%
    ------------------------------------------ ------------------------------
                      5       $64.5     6.26%        5      $128.5     5.31%
    ------------------------------------------ ------------------------------
    

    Currently, mortgage financing on Canadian multi-unit residential
properties remains favourably priced with adequate supply. In December 2008,
the Company refinanced three multi-unit residential properties at an interest
rate of 4.09% for a five-year term.
    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 investment trusts
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.
    The Company's unaudited financial statements for the three months ended
March 31, 2009 along with the Management's Discussion and Analysis and
available on the Company's website at www.morguard.com and have been filed
with SEDAR at www.sedar.com

    Morguard Corporation is a real estate company, which owns a diversified
portfolio of 102 retail, office and mixed-use properties and 10,491 multi-unit
residential properties in Canada and the United States with a book value of
$1.7 billion and approximately 6.7 million square feet of leasable space. For
more information, visit the Company's website at www.morguard.com.





For further information:

For further information: Morguard Corporation, K. (Rai) Sahi, Chief
Executive Officer, (905) 281-3800; Paul Miatello, Chief Financial Officer,
(905) 281-3800


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